By Ho Chee Loon

IT is hugely disappointing to hear of DBS Bank cutting 900 jobs.

This is a short-sighted and knee-jerk reaction. DBS is here for the long haul and has the financial strength to provide retraining to staff or can re-assign them to other operational areas. Being a bank with a long history in Singapore, and having the branding franchise of POSB, it is disappointing to see DBS responding in such a fashion with little consideration for the employees.

Other possible measures that could have been considered include:

• Salary freeze, and no bonus for the year
• Salary cuts across the board, especially higher management levels. Even for mid or junior levels, most can survive with a 10 per cent or 20 per cent pay cut rather than lose their jobs. Simple calculations will demonstrate how much salary cut is needed to retain the 900 staff. Certainly, room can be made for those who may choose voluntary or early retirement etc.
• Long-term no-pay leave
• Long leave of say 6-9 months with 20 per cent salary - for those wishing to pursue full time courses, or travel - with commitment to re-employ them on a 'best effort basis' only.

There can be many other configurations with more creative thinking.

I am not suggesting that we become totally socialistic and distribute wealth without regard for the need to hire and motivate the well-qualified and talented. Talented individuals who contribute to the bank must continue to be rewarded and retained. It is, however, important at this time to consider other factors that are pertinent to the long-term reputation and staff morale of the bank. DBS is not losing money in the third quarter, it is making less money. The CEO must certainly realise that there are good and bad years, there are economic cycles that will affect the performance of the bank. Cutting staff is the easy way out, it doesn't take a highly paid CEO to come up with such solutions. Instead, we expect more creative thinking from the CEO.

One must also look at the example DBS is setting to other local banks. The message to the business community is that 'it is okay to fire the minute things turn bad, regardless of other considerations such as long-term business prospects, reputation or loyalty'.

This article was first published in The Business Times on November 12, 2008.