Malaysia government-linked firms cut 6,170 jobs

By P Prem Kumar

KUAL LUMPUR (AA) - Malaysia's prime minister said Wednesday that over 6,000 employees from government-associated companies have been laid-off since the beginning of this year.

The move comes amid a global economic slowdown and a drop in the price of commodities.

Najib Razak told parliament that the retrenchment of 6,170 employees involved seven companies -- five government-linked (GLC) and two affiliated to the ministry of finance.

"There are five GLCs that have terminated or discontinued employment contracts of 5,134 workers," he said.

Razak, who is also the country's finance minister, was responding to lawmakers' queries on layoffs exercised by the GLCs, finance ministry, and bank subsidiaries.

Razak said factors behind the move included the termination of operations, merging of entities and business adjustment processes.

The Malaysian Airline System Bhd (MAS) recorded the highest number of lay-offs -- 4,682 -- while the airline's new entity Malaysia Airlines Bhd (MAB) laid-off two employees in 2016.

Banking firm Affin Group laid off 146 workers, conglomerate Boustead Holdings Bhd dropped 151 employees while national chemicals firm Chemical Company of Malaysia Bhd (CCM) cut its workforce by 153 workers.

Meanwhile, two companies under the finance ministry laid off a total of 1,036 workers, comprising 1,000 workers from national oil firm Petroliam Malaysia Bhd (Petronas) and 36 from agricultural banking institution Agrobank.

Razak said although the lay offs had happened for various reasons, the respective companies had ensured that each of those who lost their jobs were offered fair financial compensation according to their rights under the existing collective agreement.

Last month, Petronas President & CEO Wan Zulkiflee Wan Ariffin declined to comment on reports that Petronas might lay-off more employees soon.

"We always look at business and if there are opportunities for optimization, of course we will do that [retrenchment]," he said.

Media reports emerged last month that Petronas plans to cut several hundred more jobs in its publicly listed subsidiaries, as the firm continues to grapple with weak oil prices.

The new lay-off would be above the 1,000 retrenched employees, which was announced by Petronas last March.

The oil giant had also slashed spending by some $11.4 billion over the next four years, due to the unfavorable earnings environment.

Petronas had 53,000 employees as of the end of 2015, according to its latest annual report.

It has three major business units listed on Bursa Malaysia: Petronas Chemicals Group, Petronas Gas, and gasoline-station operator Petronas Dagangan - of which all were blue-chip counters in the local stock exchange.

Petronas Chemicals, Petronas Gas and Petronas Dagangan employed 4,659, 2,187 and 1,900 people, respectively, according to 2015 annual reports.

In March, Human Resources Minister Richard Riot said some 2,153 employees from the petroleum sector were retrenched between 2014 and 2015, due to the drop in the global crude oil price.

He had said some the contracts for 1,900 employees -- or 88 percent -- were not renewed while the remaining 253 employees' were laid off via voluntary separation scheme.

From the total, some 2,019 -- or 93 percent -- were locals while the remaining 134 were foreigners.