Leadership in crisis: How corporate chiefs across the globe are responding to Covid-19

WITH the economic impact of the coronavirus threatening the survival of even the largest companies, cost-cutting measures such as layoffs, reductions in salaries, shelved operations and scrapped dividends are now commonplace.

Companies - many with long corporate histories - face a brutal test of resilience as they fight to stay afloat amid the blows to demand and production.

Head honchos are thus under immense pressure to steer their companies through the pandemic, while supporting their employees, retaining customers, and appeasing anxious shareholders.

Here's how some corporate chiefs in Singapore and the rest of the world are dealing with Covid-19:

Marriott International

The world's largest hotel company is putting tens of thousands of hotel staff - from managers to housekeepers - on mandatory unpaid leave of absence, while it ramps up its hotel closures across the globe.

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On March 19, Marriot's chief executive officer (CEO) and president Arne Sorenson released a candid six-minute video message to employees, disclosing that the business is running about 75 per cent below normal levels.

Without sugar-coating the facts, Mr Sorenson stated that the Covid-19 period is now more devastating than any other in the history of the 92-year-old US hotel giant. The financial impact from the pandemic is also more severe and sudden than the post-Sept 11 period and financial crisis combined, he added.

Both Mr Sorenson and the company's executive chairman Bill Marriott will not take any salary for the rest of 2020. Meanwhile, the executive team will take a 50 per cent pay cut.

Said Mr Sorenson near the end of the video, his eyes welled with tears: "I have never had a more difficult moment than this one. There is simply nothing worse than telling highly valued associates... that their roles are being impacted by events completely outside of their control."

On March 22, The Wall Street Journal (WSJ) reported that Marriott will place on unpaid leave (also known as furloughing) about two-thirds of its 4,000 corporate employees at its headquarters in Maryland. It will also furlough about two-thirds of its corporate staff abroad. The corporate-staff furloughs will start in early April and last 60 to 90 days.

Keppel Corp

The conglomerate on March 19 rolled out a S$4.2 million community support package to combat the coronavirus crisis. Under the package, Keppel Electric, M1 and City Gas will give about S$3.5 million in utility rebates to Singapore residents and pay all its small and medium enterprise (SME) suppliers within one week of invoices being approved.

The package will be funded by voluntary contributions from the Keppel group's directors, senior management and staff, with the company matching contributions dollar-for-dollar.

To support this effort, Keppel's group CEO and chief financial officer, as well as CEOs of its key business units, volunteered to give up their salaries for April.

Directors of its business units will contribute an equivalent amount of their annual fees while other members of the group's senior management will forgo half a month of their salaries.

Singapore Airlines (SIA)

Singapore's flag carrier on March 23 announced it is slashing 96 per cent of its planned capacity originally scheduled up to end-April, given the further tightening of border controls around the world.

Group CEO Goh Choon Phong on March 23 said in a statement that customers and staff remain the group's top priority. "We continue to focus on getting as many of our passengers as possible back home safely and protecting the jobs of our people," Mr Goh said, adding that the group has more than doubled handling capacity at its service centres and sales offices.

Starting March 1, SIA cut salaries of senior management by 10 to 15 per cent and offering a voluntary no-pay leave scheme to employees. Mr Goh had led the way with a 15 per cent pay cut, while the SIA board of directors are taking a 15 per cent reduction in fees. Executive vice-presidents (VPs) will take a 12 per cent cut, while senior VPs, 10 per cent.

On March 24, The Business Times (BT) reported larger pay cuts at the group starting April 1 - the reductions will now be 30 per cent for Mr Goh, 25 per cent for executive VPs and 20 per cent for senior VPs. Board members will take a 30 per cent cut in fees.

SIA described the coronavirus outbreak as "the greatest challenge" that the group has faced in its nearly five-decade existence.

OCBC Bank

The group CEO of South-east Asia's second-largest bank wrote a letter to customers, cautioning that the Covid-19 situation could cause larger disruptions to global supply chains than the Sars (severe acute respiratory syndrome) epidemic in 2003.

In an email on March 20, Samuel Tsien told OCBC's customers that recovery from the crisis will start off slow, but is likely to accelerate through 2021.

"With coordinated efforts, better hygiene discipline and the arrival of the warmer season, I am still hopeful the virus will be contained later in the year, and gradual recovery of investment spending and consumer sentiments will commence soon after, starting with China," he said.

The Singapore-based bank - which is almost 90 years old - has always lived by its core values of placing the interests of its customers above everything else, he added.

"It is this same principle that has guided the bank through the most challenging of times, whether they are economic downturns, financial crises and even the world wars, and allowed us to come out of each of these events stronger."

Mr Tsien further assured customers: "We should recognise that (the Covid-19 situation) is after all still an event risk, and events come and will go away."

Gojek

Just as private-equity activity is slowing as the coronavirus rattles markets, Indonesian ride-hailing giant Gojek in mid-March made a US$1.2 billion top-up to its war chest.

Still, Gojek's co-CEOs warned employees of tough times ahead. "We have always been good at doing more with less and this ability is going to be more important than ever over the coming months," they said in an internal memo seen by BT.

"Good businesses like ours will always attract investment, but as the economic slowdown takes hold, the availability of that investment will be reduced, so we should focus every dollar where we think it will make the most impact and not take our resources for granted."

Amazon.com

The e-commerce giant's founder and CEO Jeff Bezos on March 21 published a memo to employees addressing concerns that warehouse workers were at risk of getting sick on the job during the coronavirus outbreak.

"There is no instruction manual for how to feel at a time like this, and I know this causes stress for everyone," the billionaire said in the memo.

Mr Bezo's comments came one day after US senators wrote a letter urging him to better protect warehouse workers.

He added that Amazon has put in purchase orders for millions of face masks for its employees, but "very few of those orders have been filled" as masks remain in short supply and governments are directing supplies to medical workers.

Hundreds of thousands of Amazon warehouse workers and delivery drivers have been working to ship packages to customers staying home to avoid spreading the virus.

On March 21, the company also said it is raising overtime pay for associates working in its US warehouses. That was the second time Amazon announced a pay increase in a week.

Hyatt Hotels Corp

The Chicago-headquartered hospitality company has resorted to staff reductions and other cost-cutting measures.

Hyatt CEO Mark Hoplamazian and chairman Tom Pritzker are also foregoing salaries through May, a company spokesman told WSJ on March 22.

The company is temporarily furloughing "many" hotel managers and reducing hours for "most colleagues", the spokesman said. However, US employees' eligibility for healthcare and other benefits will not change, and they may also file for unemployment benefits.

For the latest numbers on the global coronavirus situation, go to bt.sg/ncov