In the 3Q2023 Labour Market Report, we reported that retrenchment was on the rise with 4,110 workers retrenched in 3Q2023 as more firms undertook restructuring activities, driven by concerns over business operations and escalating costs.
Earlier this week, it was reported that Lazada had made some unexpected layoffs in Singapore. This was part of a broader workforce reduction within the Alibaba-owned company, which included the dismissal of top-level executives and other staff members around the region.
The layoffs at Lazada have attracted significant attention and criticism. Early indications suggest that the process and manner of executing these retrenchments were suboptimal, leading to considerable dissatisfaction among the affected employees. The matter has also been escalated to the Ministry of Manpower (MOM).
It’s important to note that retrenchments are not new to Singapore. Even big and profitable tech companies like Google have retrenched workers worldwide including Singapore.
This raises a question: What specific aspects of Lazada’s layoff strategy caused such a strong reaction from both the employees and the union? And what could it have done better to mitigate the strong negative reactions?
Inform The Authorities Of The Retrenchment Exercise
According to the Ministry of Manpower, it’s mandatory for employers with at least 10 employees who have retrenched any employees to notify MOM of the retrenchment exercise. When applicable, the relevant unions should also be informed.
Informing the authorities well in advance about impending retrenchment exercises isn’t just a procedural formality; it plays a crucial role in safeguarding the interests of the affected employees.
When a company shares its plans for retrenchments beforehand, it enables relevant government agencies to proactively engage in mitigating the impact on these workers. This early notification is key because it allows these agencies to prepare and provide timely assistance to the employees who will be displaced.
Such assistance can take various forms, most notably in facilitating alternative employment opportunities. By having prior knowledge of the layoffs, government bodies can mobilise their resources and networks to identify and propose suitable job openings in other sectors or companies for affected workers.
This early intervention offers more than just job placement services. It can include career counselling, skill assessment, and possibly retraining programs tailored to align the workers’ skills with the demands of the current job market.
Finding A Better Time For The Retrenchment Exercise
In Singapore, the beginning and end of each year are traditionally festive periods, marked by the celebration of Christmas, New Year, and Chinese New Year within a span of less than two months. Additionally, December is commonly a time when many workers and their families take extended breaks.
Lazada’s decision to conduct retrenchments in the first week of January likely stems from the December holiday period, when many employees are on break. This might have influenced the company’s choice to announce the retrenchment exercise in January when the majority of the workforce would be back at work and more readily reachable.
However, the timing in January presents its own challenges, particularly in the context of the cultural significance of the upcoming Chinese New Year, which falls on the 10th and 11th of February.
Announcing retrenchments so close to this major festival can be seen as insensitive. Moreover, from a practical standpoint, job hunting during the Chinese New Year period can be challenging. Many businesses slow down during this time, and hiring processes are often put on hold, resuming only after the festivities. This means that affected employees might find it more difficult to secure new employment quickly, prolonging their period of uncertainty and financial insecurity.
Retrenchment exercises have a significant impact on the lives of the affected workers. The very nature of retrenchments – involving the loss of jobs – often brings about financial insecurity, emotional distress, and professional uncertainty for those involved. It’s imperative for companies involved in retrenchment exercises to handle them with the utmost responsibility and sensitivity.
Read Also: The Twitter Retrenchment: Why Labour Unions Are Still Relevant Today
Subscribe To The DollarsAndSense Business Pass
Enjoy what you are reading and want more? Join The DollarsAndSense Business Pass and unlock access to valuable tools, exclusive networking opportunities, and tap into the wisdom of industry experts to fuel your business expansion!
