Firms vow no layoffs as landlords urged to cut rents

About 200 SAR companies and 4,000 mainland-funded firms have signed a pledge to not lay off anyone amid the pandemic, according to the Hong Kong Coalition.

Representatives from 50 companies attended the pledge's briefing yesterday, including those from Bank of China, China Resources, China Merchant Group, CTS House and China Taiping Insurance.

Irons Sze Wing-wai, permanent honorary president of the Chinese Manufacturers' Association and a coalition deputy, said Bank of China and China Resources alone employ more than 100,000 people.

Sze said the pandemic has battered the economy, which is already weakened by the recent political unrest.

"The city's GDP plunged 8.9 percent year on year in the first quarter of 2020 - the worst decline on record since 1974," he said.

"Businesses in different sectors and industries are dim. It is as if they have entered a harsh winter."

Sze said the coalition decided to take the initiative to support the livelihoods of employees amid the economic downturn.

"Many of us have weathered the 1997 Asian financial crisis, SARS in 2003, the financial crisis of 2007 to 2008 ... during these predicaments, businesses also carried the great responsibility [of helping employees] and stuck together," Sze said.

He said although companies have made a no-layoff pledge, workers may still face salary cuts and forced unpaid leave.

Sze said despite some firms choosing not to sack more people after the government announced the HK$80 billion wage subsidy scheme, that is not the case for the tourism and aviation sectors.

The coalition was also called upon by Chief Executive Carrie Lam Cheng Yuet-ngor to help persuade landlords to lower rents as the government's efforts have been "ineffective."

Lam said since some of the 1,545 coalition initiators are landlords, she appealed to them to take the lead in lowering rent.

In response, Sze said they would leave rent reduction negotiations to developers and tenants.

So Cheung-wing, another coalition deputy and chairman of Faithful Best Holdings, said many landlords of malls have in fact "frozen" rents.

"Some malls have also provided coupons to consumers by way of encouraging them to increase their spending there," So said. "In return, this can also support the rent of tenants."

The coalition is a group launched by pro-Beijing heavyweights on May 5.

It includes former chief executives Tung Chee-hwa and Leung Chun-ying, and National People's Congress Standing Committee member Tam Yiu-chung.

The group vowed to "reboot" the city by upholding one country, two systems, reviving the economy and restoring the rule of law.

erin.chan@singtaonewscorp.com