SMEs are not laying off despite high operating cost and drop in business

China Press, June 4, 2015

Kuala Lumpur, June 4 – Although Malaysian Employers Federation (MEF) had mentioned that some Malaysian companies are considering cutting staff either through retrenchment or voluntary separation schemes in the wake of falling sales and high operating costs, SME Association of Malaysia and the Federation of Malaysia Chinese Guilds Association said there is no such plan by their members at the moment.

President of SME Association of Malaysia Teh Kee Sin did not deny that the industry was facing with problems of increased in operating cost, slow in business and business environment not clear and fragile, but the small and medium industries in the country had not reached the stage of layoff yet.

He said this is because of low population in the country with almost full employment, some areas were still facing with manpower shortage, it will not be easy to solve even with the employment of foreign workers and therefore, there is no such problem of retrenchment.

He told China Press that in view of the situation, the industries would only be more careful or more reserve in taking in of new employee. If there is any layoff by big companies, the SMIs may take the opportunity to absorb some executives or technicians.

He said some enterprises might still in the transitional period in adapting themselves to the Goods and Services Tax (GST), but he believed that the problem would not be hanging on for too long.

MEF executive director Datuk Shamsuddin had told the Malaysian Insider that about 20% of its members were looking into such options and they cut across all economic sectors from retail to hospitality to manufacturing.

He said for some members, business was almost 30% down these past few months. So they were looking at either retrenchment or voluntary separation exercises.

President of the Malaysia Chinese Guilds Association Datuk Chai Kim Sen said he did not receive any report from its members about any retrenchment plan, what he received were the complaints about the present predicaments and hoped the association would help them.

He said demand and supply is the market rule, he did not see the need to resort to layoff based on the current situation.

Original Source: 成本起生意跌難撐？ 公會否認中小企業裁員