MEF: Cost cutting measures inevitable

AMID dwindling profits, businesses are facing the gloomy prospect of having to embark on major cost-cutting measures to stay afloat.

“Most businesses have lost revenue by at least 30% but our expenditure remains the same,” Malaysian Employers Federation executive director Datuk Shamsuddin Bardan told FocusM.

He was reacting to the announcement by Senior Minister (Security) Datuk Seri Ismail Sabri Yaakob yesterday that the conditional movement control order (CMCO) in Selangor, Kuala Lumpur and Putrajaya will be extended until Nov 9.

The CMCO was set to expire midnight yesterday before the Bera MP decided to extend it on grounds that he was informed by health authorities that the current number of COVID-19 cases have yet to dip.

“We will also enforce CMCO in Nilai, Negeri Sembilan, effective Oct 28 until Nov 10,” Ismail was reported as saying.

The Health Ministry yesterday reported 1,240 new COVID-19 cases and seven deaths. It was the highest number of cases recorded to date.

Shamsuddin urged the government to understand employers’ position on the need to reduce operational costs as the economy continues to be ravaged by the COVID-19 pandemic.

“If not, we may need to look into pay cuts for our employees, which will be very unpopular as they are also struggling to survive. So, it’s better for us to look into cost-cutting measures at our end first,” he said.

On what the government can do to help businesses, Shamsuddin said further reduction on utility charges such as water, electricity and telephone could be one of the options.

“We also need supportive environment to allow flexibility in terms of work arrangement. Work from home is one of the good ideas that came by,” he noted.

Businesses are adapting to CMCO

On how the CMCO extension will affect businesses, Shamsuddin said many businesses had expected it in the first place due to the rising number of COVID-19 infection.

“The dust has settled on the matter. We are quite clear on the SOP, so there is less confusion now,” he explained.

SME Association president Datuk Michael Kang shared Shamsuddin’s sentiments but added many businesses have embarked on creative measures to sustain themselves.

“A lot of businesses, especially retail outlets in shopping malls, have gone online to reach out to customers.

“While it may work for retail sector, restaurant businesses may face some challenges to pull through during CMCO,” he said.

However, Kang added the situation may persist for some time and everyone has to adapt due to the ongoing pandemic.

“Just make sure the SOP is clear. If not, it may create a lot confusion among the public,” he remarked.

 

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