Electrolux to shut regional HQ in Singapore by May, affecting 100 to 200 employees

SINGAPORE — Swedish home appliances maker Electrolux will be shutting its regional headquarters in Singapore by May, potentially affecting around 100 to 200 employees, The Straits Times has learnt.

Sources said that most of the affected employees will be retrenched, although a handful have been offered relocation packages.

In response to queries from ST, Electrolux's director of communication for Asia Pacific, Middle East and Africa (Apac & MEA) transformation, Samar Refai, on Feb 2 confirmed the imminent closure of its regional headquarters for Apac & MEA at Rochester Park, but did not comment on the May deadline.

She added that the impending closure was announced internally on Dec 13, 2023.

The Apac & MEA commercial leadership team will also relocate to Bangkok, said Refai.

"The imminent closure of Electrolux's regional office in Singapore ultimately means that we will need to part ways with some of our regional employees. Those who are impacted are offered the maximum level of support, during the upcoming transition period, and are treated with utmost respect," said Refai, without adding more details.

The writing has been on the wall for the Singapore regional office for a few months.

The multinational company announced in a press release in October 2023 that it will slash 3,000 positions from a total of 46,000 globally, as consumer demand remains weak. Electrolux also said then that it will be merging the Europe and Apac & MEA business regions to leverage product and brand synergies.

[[nid:665812]]

Under the newly created business area Europe, Apac & MEA, there are two commercial organisations — one for Europe and another for Apac & MEA.

Refai said that with a newly established commercial set-up for Apac & MEA, Australia and Thailand are becoming key hubs for Electrolux in the region.

"Having the regional capabilities and competencies within these hubs ensures proximity to our customers, consumers, manufacturing sites, research and development, and innovation centres," she said.

Electrolux has another office in Braddell Road, which handles product servicing and sales in Singapore, and that will remain open.

Refai said that the closure of the regional office in Rochester will have no impact on the operational business and trade relations in any of Electrolux Group's markets in Apac & MEA, including the Singapore sales office in Braddell.

"Electrolux will continue to drive its important business in the Apac & MEA region, focusing on growth," she added.

Staff have been on tenterhooks ever since the December announcement of the impending closure of the office because they did not know when exactly it would happen, said three employees who spoke to ST on condition of anonymity.

The employees estimated that there are about 100 to 200 employees working in the Rochester office. The office comprises a mix of Singaporeans, permanent residents and expatriates, and houses teams such as marketing, finance and product design.

Staff were invited to a physical town hall meeting at the regional headquarters' office at Rochester Park on Jan 17. No one was allowed to dial-in virtually or take any recordings.

At the hour-long meeting, they were told that the physical office will close by May and that the human resources department will be setting up one-on-one meetings with all staff members to discuss their individual arrangements over the coming weeks.

Details of the retrenchment package were also revealed at the meeting.

Staff would get three weeks of pay for every year of service, capped at 30 weeks, the employees said.

On top of that, there would be one month's pay for those who had been with the company for three years and under, two months' pay for those who had been with the company for three to six years, three months' pay for those who have worked for the company for six to 10 years, and four months' pay for those who have worked for the company for more than a decade.

As for notice period, which ranges from one to three months depending on the contracts, employees can choose to either serve garden leave, or have pay in lieu of notice.

Employees said they were glad that the severance package was substantial, as it will tide them over their job search.

But they were mixed about how the company communicated the retrenchment exercise. They declined to give their real names for this story.

"I thought it was quite fair of the company to try and pre-empt us in phases. It's not like other companies where the retrenchment comes out of nowhere," said Kenneth, who has been with the company for under three years.

But Betty, who has also been with the company for under three years, disagrees.

"It's insensitive to put people through this through the holiday season by leaving them with months of uncertainty. We've been all stressed out and upset. People haven't been able to sleep well, and the morale has been low over the past few months," she said.

[[nid:665592]]

Employees estimate that less than 20 per cent of them had been offered relocation packages, mostly to Bangkok.

No information on relocation packages were given during the town hall.

Questions raised at the town hall included whether relocated employees could travel back to Singapore to see family, and what would happen if they changed their minds after accepting relocation.

Company representatives said that travel arrangements to see family will have to be discussed with the line manager and costs borne by the employee. Those who change their minds about relocation will not get any retrenchment benefits.

"I heard that staff who were offered relocation packages were worried that if they went through all the trouble to relocate to Bangkok, and if the company was still doing badly, they might be retrenched after relocating. What are they going to do? Will their company pay for relocation back to Singapore?" said Betty.

For now, retrenched employees are most concerned about finding new jobs in a challenging job market.

According to figures released on Jan 31, retrenchments in Singapore more than doubled in 2023 from the previous year to 14,320. Business reorganisation or restructuring remained the top reason for retrenchments in 2023, due in part to the impact of global economic headwinds on outward-oriented sectors such as wholesale trade, information technology services and electronics manufacturing.

A series of high-profile mass lay-offs had hit the technology and finance sectors in recent weeks, affecting firms including regional e-commerce firm Lazada.

"Looking for a job in the tight competitive environment is very tough, especially if other people are being retrenched as well," said another employee, Derrick, who is below 40 and married with children.

"I'm also worried. Is Singapore getting too expensive to do business such that other countries are becoming more attractive?"

ST has contacted the National Trades Union Congress for comment.

ALSO READ: Retrenchments in Singapore more than doubled in 2023, MOM report shows

This article was first published in The Straits Times. Permission required for reproduction.