Coronavirus fears are at an all-time high. Global infection and death rates have increased exponentially as well - official global infections have more than doubled in less than a month, from less than 1 million at the start of April to more than 2.6 million at the time of writing.
Understandably, much of the world is now on lockdown to minimise the spread, but preventive measures have had devastating impacts on the economy, especially the travel, retail, F&B, and transport industries. In response, companies all around the world have implemented various measures such as wage and hiring freezes.
This has been seen locally as well. For instance, CapitaLand recently announced pay cuts and salary freezes for some staff, while state investor and CapitaLand’s major shareholder Temasek Holdings will freeze all salaries. Similarly, after reducing flight capacity, Singapore Airlines has also stopped recruitment and may implement pay cuts soon.
We are also beginning to see companies, especially those with poor business performance in the last financial year, take more drastic action. For example, travel agency Expedia, in response to poor business performance and coronavirus-related uncertainties, will be retrenching 12% of staff across all global offices, starting in Hong Kong and Singapore.
In times of poor economic outlook, individuals like us have little control and are often forced to accept such cost-cutting measures. What should we then do to minimise any negative impacts of economic recessions caused by epidemics or other factors?
Cut Down Unnecessary Costs
The easiest thing we can do (that is within our control) would be to cut down on unnecessary costs. In the digital age, almost everyone has a good mobile plan, high-speed wifi and access to content via streaming services. However, during an economic downturn, it is crucial to make sure tha