I ACKNOWLEDGE concerns raised in letters in The Straits Times Forum.

While the recent decision to reduce our staff levels may have given the perception that this was a rash cost-cutting initiative of first resort, the fact is we discussed and debated various options at length.

A hiring freeze was already in place and we considered temporary measures, including tiered pay reductions across the organisation. However the anticipated decrease in bonuses this year is already a form of pay cut, and further reduction in salaries would hurt our junior employees most. Our streamlining was deepest at the top, with 16 per cent of senior management affected versus 3.5 per cent of junior staff. Of the approximately 450 staff affected in Singapore, 45 were ordinary union members.

DBS today is much more international than before. With nearly half of our staff based outside Singapore, it was not fair for Singapore-based staff to bear the brunt of the pay cuts. Although not apparent, staff reductions were also carried out in our regional markets, not just Singapore and Hong Kong.

But the most important consideration of all is that the changes in the financial landscape are drastic and permanent - they are not cyclical. For example, the merger of credit and market risks into one function led to jobs lost that will not come back. It is essential that we come to terms with this harsh reality. Across the globe, and in Asia, financial institutions are restructuring their labour force.

It was sad and difficult to part with colleagues and friends. We made every effort to ensure a smooth transition and provided professional counsellors and outplacement services for all affected staff.

This exercise was not merely for cost reduction. Streamlining and optimising staff resources to match the realities of the new environment are just one part of an overall programme to position DBS for the future and take advantage of opportunities arising from this crisis. This includes improving our technology platform and reorganising for greater teamwork.

The easier thing to do was to avoid making this tough and unpopular decision.

However, we are intent on positioning DBS for strength and growth. We believe this is prudent and necessary for the bank in the long run, and that we are doing what is right for the vast majority of our staff, customers and shareholders.

Karen Ngui (Ms)
Managing Director & Head
Group Strategic Marketing & Communications
DBS Bank