Business

Aboitiz Group bows to coronavirus pain with job cuts

Aboitiz Group bows to coronavirus pain with job cuts

MANILA, Philippines — Conglomerate Aboitiz Group on Wednesday announced an unspecified number of employees would be let go by next month under a “rationalization” plan triggered by business disruptions from the lingering coronavirus disease-2019 (COVID-19) pandemic.

“The Aboitiz Group carried out a review of its operations in light of the present challenges brought about by the COVID-19 pandemic,” the company said in a statement.

“Part of the review is the rationalization of its workforce, where, regrettably, several team members will be affected by their service ending on July 31, 2020,” it added.

The company, which has interests on power, infrastructure and banking, among others, employed 11,866 people as of last year. Aboitiz did not provide details on the people who will lose their jobs, but said they “will receive a substantial separation package.”

“This was not an easy decision for the Aboitiz Group to make but one that had to be done as it has not been spared by the health and economic crisis,” the company said.

“It is still not clear on how long the COVID-19 pandemic will last but we share everybody’s hope that a vaccine will be developed soon,” it added.

Aboitiz’s announcement reflected a growing financial pain for local firms heavily battered by the pandemic. While lockdown measures had been eased beginning June 1, the persistent threat of a virus spread has forced companies to operate under a skeleton force, ditch expansion plans and assist employees at their own costs.

Apart from Aboitiz, several companies have started downsizing their workforce, including airlines Cebu Air Inc., AirAsia Philippines and Philippine Airlines. This was despite government appeal to avoid termination, and instead cut back salaries if only to save employees from getting fired.

Retrenchments at Aboitiz will come after its holding firm, Aboitiz Equity Ventures, saw its net income plunge 42% year-on-year to P2 billion in the first quarter, which captures the impact of the first two weeks of lockdown. More financial pain is expected this quarter ending June.

That said, the company assured the public that business services will go unhampered. “The operations and maintenance of various Aboitiz facilities remain normal as they are sufficiently manned and will not be affected by the workforce rationalization process,” the firm said.

“The Aboitiz Group is confident the Philippines can weather this crisis and the country will continue with its economic growth,” it added.

On Wednesday, shares at AEV closed down 1.4% to end trading at P46.75 apiece. Another listed firm, Aboitiz Power Power Corp. saw shares slipped 1.3% to P26.70 each.

The local benchmark lost 1.73% on a daily basis.