The reality of the global financial crisis is starting to be felt in Malaysia. It is no longer a distant problem. It is no longer something that only Americans have to worry about. The coming financial tsunami is no longer just another boring news item suitable only for the business section as we spend our time talking about politics.
Computer maker Dell is offering voluntary separation scheme (VSS) to its 5,000 Malaysian staff in Penang and Cyberjaya as part of its global restructuring exercise. VSS simply means the company will pay off workers to leave the company, preferably the less productive ones. It is less painful than retrenchments. Penang will be hit the hardest where there is a large concentration of multi national companies, particularly the electronics sector.
The reality is that demand has gone down and that means production must also go down. When that happens, companies do not need so many workers. Companies can reduce production hours or impose pay cuts but that would simply means buying time. Eventually, staff would have to be let go to reduce operating cost. Employers all over are looking at ways to cut expenses to keep their companies to stay afloat and save jobs, which is difficult to explain to staff.
Staff, especially unions, which demand pay increases as companies struggle to meet sales targets are simply ignoring the realities of the day. More bad news will come. It's time our politicians wake up and focus their attention on economics.