Retrenchment - Malaysia vs Overseas

As some of you might know, I am a regular follower of Dali at http://malaysiafinance.blogspot.com/
His recent piece compared how Malaysian local companies did not really bother to retrench, compared to MMCs and foreign companies.

My point of view?

I am SURE that the price of labour has a lot to do with the difference in policy... for local firms, salaries a a much lower percentage. Take Tenaga, Proton, MayBank... what % of the annual revenue/profit do salaries make up? Compare that with General Motors, AIG, Goldman... where even 10% layoffs translated to pretty HUGE savings.
In the UK, an accountant get's like RM240,000 a year. In Malaysia, they get like RM 48,000 a year. So, in order to make the same amount of savings, a malaysian company needs to fire of 5 times the number of workers.
Or take General Motors. According to various reports, the cost of employing a GM factory worker, including wages and fringes, would not be in excess of $72 per hour. A FACTORY WORKER. Our local factory workers are getting RM1000 - RM3000 a month, but these guys are getting RM40,000 a month. Yes, dear dog, no wonder GM is in trouble.


One more thing. A lot of hiring that was going on was due to "optimism". Due to the length of the training cycle, companies have to prepare early for future growth, if you expect business to grow 40% in 2 years, you need to finish hiring 30% extra staff in 1 year. In fact, it wouldn't take a big fall in business for layoffs... in recent overheated job market environment, all it would have required would have been for revenue levels to stagnate for 2-3 years. That would already have been enough to have plenty of idle workers.