CapitaLand Investment’s retrenchments: Mind the downsides of a profitable business laying off staff

[SINGAPORE] Global real asset manager CapitaLand Investment (CLI) posted a robust set of results for the first half. 

Driven by higher fee income from its listed and private fund management platforms, operating profit after tax and minority interests grew 13 per cent year on year (yoy) to S$293 million.

Together with portfolio gains from asset recycling, net profit attributable to shareholders climbed 14 per cent yoy to S$327 million. 

Fee income from listed and private funds in H1 jumped 20 per cent from the same period the year before to reach S$687 million. 

As at end-June, CLI had S$128 billion in funds under management, spread across diverse asset classes.

As a shareholder of CLI, I am encouraged by the group’s positive results and outlook. In the statement for its H1 results, the group said that it expects continued growth in its fund management revenue in the current financial year, and that it is well-positioned to deliver sustainable earnings growth.

However, my confidence in CLI’s prospects was shaken by the news in early September that the company has so far laid off about 90 employees this year – about 4 per cent of its Singapore-based workforce as part of a restructuring exercise.

According to a joint statement by CLI and the Singapore Industrial and Services Employees’ Union, the company “periodically reviews its organisational structure” to ensure that it remains aligned with its strategic priorities and long-term business needs.

Certainly, a company should review its organisational structure periodically to ensure it remains fit-for-purpose.

Also, it is heartening to note that affected employees were given fair severance arrangements, career transition services and counselling support, and considered for redeployment opportunities within the group where appropriate.

Job market uncertainties

Still, losing a job can be extremely painful – emotionally and financially – for the affected individual and his household, particularly if it is unexpected. 

The pain of retrenchment may be worse for employees who have been consistently working hard for their employer and those who could find it tough securing a suitable new full-time job.

Unfortunately, retrenchments are not rare these days and hardly any employer provides staff with an iron rice bowl. 

Despite Singapore’s economy growing strongly in H1, there is job market uncertainty among the sectors as businesses face disruption – be it from technological changes, geopolitical conflicts, higher trade barriers or the rise of artificial intelligence.  

And retrenchments are understandable when a company or its business unit hits dire straits. In such instances, survival may hinge on quickly shedding manpower costs.

In fine fettle

However, what can be hard to swallow is why a company that is churning out decent profits and confident of its future is cutting a significant number of jobs.

Sure, CLI faces challenges. The possibility of higher interest rates might make it harder to grow the listed and private fund management platforms.

As it stands, CLI’s share price of S$2.65 as at Monday (Sep 14) is down 2 per cent from its close at end-2025 of S$2.71.

Nonetheless, on balance, CLI’s business appears to be in fine fettle. For one thing, the group has a strong balance sheet with headroom for growth investments.

Of course, shareholders may like any listed company to run a tight ship and keep manpower costs lean in order to drive higher profitability.

Still, shareholders who focus on the long term could be fine for a company to keep some fat in its headcount, especially if the company’s financial health is robust.  

Having spare capacity allows a company to better scale up to capture new opportunities or pivot faster to cope with sudden disruptions or better support staff in undergoing training to upskill their capabilities.

Perhaps having extra manpower can lead to higher service levels for customers or the generation of more innovative ideas.

Importantly, when a company cuts many jobs, this can shake staff morale. Might unaffected staff grow more fearful for their jobs and start to actively look for new employment opportunities elsewhere or engage more in internal politics to improve their position in the organisation? 

Across its funds management, lodging management and commercial management businesses, CLI faces a competitive environment. To secure an edge, the group needs its staff to be highly motivated. 

In its latest annual report, CLI touts among its many achievements the winning of various human resource accolades. Also, the group stresses its commitment to reinforce its reputation as an employer of choice. 

There is no denying that CLI, as one of Singapore’s leading companies, is a desirable employer. However, could laying off around 90 employees in its home base make it less attractive in the eyes of its staff and potential new hires?  

Led by group chief executive officer Lee Chee Koon, CLI is a leading name among Singapore’s corporates and has numerous institutional as well as retail shareholders. 

When a big company cuts many jobs, much effort should be devoted to sharing details of such a move with investors and with the general public, and to addressing the concerns of these stakeholders.

After all, sharing bad as well as good news with candour are the hallmark of strong investor relations and corporate communications.

Helping Singapore

Over the past decades, Singapore has done well on the jobs front. Creating good jobs for locals of all age groups matters as a healthy employment market is vital for maintaining social cohesion.

Today, many people are anxious over their employment prospects.

Young graduates fret over being able to snare a good first job while middle-aged workers worry whether they can easily switch careers. Older workers wonder if they can remain in employment for much longer should they so desire.

Reducing job market anxieties can help improve the mental well-being of residents and possibly make young couples more confident to have children.

The government is working hard on the jobs front. Major Singapore-headquartered companies can contribute greatly to nation building by being successful, and in turn, giving locals good jobs.

Meanwhile, Singapore companies should see showing loyalty to staff as being the right thing to do as well as something which can provide them an edge in attracting and retaining talent. 

May Singapore companies, led by the big players, do their utmost to avoid cutting jobs and to equip their staff with relevant skills so a committed and skilled workforce can power the Republic’s economy through choppy waters.