BreadTalk Group Struggles in Financial Trouble

In the midst of what it called its most challenging crisis since it started operations in 2000, BreadTalk Group is placing its more than 3,800 employees in Singapore on varying degrees of no-pay leave to save jobs and keep the company afloat.

In a letter addressed to group the company’s staff members on April 17, chairman and CEO George Quek said that the company may be forced to downsize if the situation persists.

He added that daily revenues have plunged by 90% in some areas since the circuit breaker measures took effect. The company said that layoffs are not being considered for now and will only be deployed as a last resort.

Earlier in February, BreadTalk Group’s financial statements showed a net loss of USD8.1m in the last quarter of 2019 compared with a net profit of USD8.9m a year ago. The group also reported a net loss of USD5.2m for the full year, a sharp turn from the net profit of USD15.2m a year ago.

On March 23, BreadTalk Group made a statement to the Singapore Exchange regarding wage cuts, where middle and senior management staff members across its operations in China, Hong Kong, Singapore and other Southeast Asian countries were affected.

For employees in mainland China and Hong Kong, they would have a pay cut of between 30% and 50% from February to June.

The management said in the circular that despite the grants and the efforts to save costs and increase revenue, the challenges of the macro-environment are still crippling the group’s business, and that salaries represent more than half of the cost of supporting its operations in Singapore.

Around 300 employees at its headquarters are expected to take a minimum of four days of compulsory no-pay leave from April to June.

The no-pay leave arrangements will come on top of wage cuts of 10% to 50% for managerial and higher-ranking positions. Staff members may also apply for voluntary no-pay leave.