By D. Arul Rajoo
BANGKOK, March 19 (Bernama) -- Severe global economic crisis has taken its toll on Thai companies, with massive layoffs, freeze in hiring and pay hike, more mutual separation programmes and cutting down benefits of the large expat work force taking place rapidly, a survey shows.
The survey among 141 companies in 19 sectors undertaken by Hewitt Associates found that 26 percent of companies indicated that they have already conducted lay-offs in the last months while another 30 percent anticipate conducting further lay- offs in the next six months.
In the last six months, the automotive and transportation services industries have seen the highest prevalence of lay-offs at a whopping 57.1 percent, the human resources consulting and outsourcing services firm said in its "Impact of Economic and Political Uncertainty/Instability on Businesses in Thailand" survey.
As they relied heavily on import and export businesses, the dwindling demand from overseas was obvious, especially with Thailand being the "Detroit of Asia" where several automotive manufacturing plants that serve a large export market are located here.
The auto industry forecasts shows that total vehicle production will drop to one million in 2009 compared to 1.4 last years.
Other industries where more than 25 percent of companies have experienced layoffs in the last six months are the energy, and banking and finance industries.
The Thai Ministry of Labour has reported that more than 100,000 people were made unemployed in Feb, 2009 alone while the Bank of Thailand has revised its GDP forecast for 2009 from previous expectations of four to five percent to between zero and two percent.
Over the last four months, there was a drastic difference in the impact of the economic and political uncertainty on businesses in the country, which went through months of political crisis due to street demonstrations, constant change of governments and closure of two major airports by anti-government protesters.
"If the economy continues to wither, these numbers may increase even further especially in those industries that face huge fixed costs as part of their business model," said Hewitt.
It said that even though there were no signs of the crisis recovering in the near future, the measures that companies in Thailand have implemented or are considering to implement are still far from drastic.
According to Hewitt, in its November 2008 pulse survey, it saw a mere 25 percent of companies "feeling some pain" from the crisis, but the number has now increased by almost two-fold to 46 percent.
"This means that almost half of the companies that participated in this survey have seen both their sales and growth forecasts drop significantly from their previous budgets," it said.
Among measures taken by companies to weather the crisis were pay freezes, pay cuts, reduce overtime or place stringent control on overtime expenses, reduction in fuel allowance, business travel and entertainment, as well as trimming company activities like office outing, sports day, annual party and extending replacement period of company car.
Besides freeze in hiring, 30 percent of the companies surveyed said they are undertaking improvement of job skills through internal job rotation to curb the need to hire outside talent to fill in any vacant positions.