The following is a letter from Kent Tan to The Online Citizen.
I read the article by Gerald Giam (“Billion dollar profits but still axing jobs“) with great interest. I am not good with words, therefore I [will] use numbers to support what I want to say.
For simplicity sake, let’s take that a company is made up of 1 CEO, 1 Manager and 4 Executive, and their monthly wages are tabulated as follows:
Now that the company face a downturn and in hope to cut cost, say 10% of the operating expenses. One of the common approaches is retrenchment, as shown below:
But is it the only approach available?
Should the head of the company make some sacrifices for the sake of his employees’ livelihood as shown in scenario 2? Afterall, getting $21k per month is still 10 times more than what his executives are getting.
Or the company can try taking a salary cut altogether to help the company tide the wave as shown in Scenario 3, so that everyone can keep their rice bowl.
If you are the head of this company, which approach would you take?
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