ONE Championship, the Singapore-based mixed martial arts (MMA) organisation backed by Temasek Holdings, laid off “a few dozen” employees on 16 October 2024 as part of a cost-cutting effort aimed at reaching profitability.

The layoffs, affecting approximately 30 to 40 employees at the Singapore office, occurred on the same day the company secured a US$50 million investment from investors, including the Qatar Investment Authority. This juxtaposition of retrenchments alongside fresh capital has raised concerns over the company’s financial management and long-term strategy.

The Economic Development Board (EDB) has confirmed its involvement, offering assistance to affected employees. EDB, which operates under Singapore’s Ministry of Trade and Industry, is working with ONE Championship to help the retrenched staff find new employment opportunities or engage in skills training.

In a statement to CNA, EDB acknowledged that companies periodically reassess their workforce and strategies due to market changes.

ONE Championship stated that the layoffs are part of its “overall strategic plan” to streamline operations and reach profitability.

This is the second significant retrenchment for the company, following a reduction of 20% of its global workforce in 2020 during the COVID-19 pandemic.

Despite the layoffs, CEO Chatri Sityodtong has previously expressed confidence in the company’s future, revealing in a June 2024 interview with the South China Morning Post that ONE is on track to reach profitability this year after implementing several revenue-enhancing measures.

The retrenchments come as ONE has faced challenges in holding events in Singapore, with most of its recent shows taking place in Bangkok. However, the company has experienced substantial growth in other areas. In 2021, ONE secured a valuation of US$1.4 billion, and according to Chatri, it has since seen exponential growth in popularity metrics, which has driven significant revenue increases. Forbes magazine recently estimated ONE Championship’s current valuation at US$1.3 billion, though Chatri expressed his belief that the company is now worth more than that estimate.

Despite these positive financial projections, the timing of the layoffs alongside the announcement of a significant investment has led to questions about how the company is balancing its operational costs with its profitability goals.

One former employee, speaking to CNA on condition of anonymity, described the lead-up to the layoffs as tense, with rumours circulating for several weeks. A virtual company-wide meeting confirmed suspicions, as CEO Chatri Sityodtong informed staff that those receiving calls after the meeting would be laid off, similar to how layoffs were handled in 2020.

After the layoffs were announced, affected employees were immediately locked out of their work systems. Compensation packages reportedly included two weeks’ pay for each year of service, one month’s notice-period pay, and encashed leave.

The suddenness of the layoffs, combined with the company’s recent success in attracting investments, has caused frustration among staff.

These layoffs also come amidst broader retrenchment trends seen across Singapore.

Earlier this month, technology firm Dyson and electronics giant Samsung announced job cuts that impacted their Singapore-based employees, marking several high-profile retrenchments in recent weeks.

Contrarian investments by Temasek

The company’s ability to raise significant capital while cutting jobs has raised questions about its long-term strategy, particularly in light of its history with Temasek Holdings, a key investor.

Temasek, through its subsidiary Heliconia Capital Management, invested a significant eight-figure sum into ONE Championship in 2016, during Mdm Ho Ching’s tenure as CEO.

This investment was seen as a strategic move to help ONE expand its presence across Asia and build itself into the region’s largest sports media property.

Mdm Ho, who led the sovereign wealth fund from 2004 to 2021, oversaw numerous high-profile investments, including the stake in ONE Championship.

Under her leadership, Temasek became known for making bold, long-term investments, even in sectors that carried considerable risk.

In a Facebook post on 26 November 2022, Mdm Ho addressed Temasek’s investment strategy following the write-down of US$275 million in its investment in the now-bankrupt cryptocurrency exchange FTX.

In the post, she emphasised that while losses are painful, Temasek’s ability to take a long-term view allows it to recover from setbacks.

“Some of Temasek’s best investments were made by being contrarian,” she noted, though she did not specify examples.

She added that Temasek’s financial strength allows it to make contrarian bets because it “can think long term” and is not influenced by short-term market movements.

Mdm Ho’s comments underline the philosophy behind Temasek’s investment decisions, including its stake in ONE Championship.

While the 2016 investment was aimed at positioning ONE as a dominant force in Asian sports media, the company has faced ongoing challenges in achieving profitability, as evidenced by the latest round of retrenchments.

Temasek itself remains a financial powerhouse, managing assets worth S$389 billion as of March 2023, a slight increase from S$382 billion the previous year. However, the company has faced a volatile market environment, posting a modest 1.6% shareholder return for the year, a small recovery from a negative 5.07% return in 2022, the worst since 2016.

Mdm Ho’s remarks on the risks of contrarian investments, such as those into ONE Championship and other ventures, suggest that Temasek continues to balance high-reward opportunities with the inherent risks of investing in innovative but unproven sectors.

SINGAPORE: The Ministry of Manpower (MOM) has defended Dyson’s retrenchment exercise in Singapore, following the company’s layoffs that occurred earlier in October 2024.

In a statement to local media on Saturday, MOM confirmed that Dyson submitted the mandatory retrenchment notification within five working days of informing affected employees, which the ministry stated was “on time” according to existing regulations.

Despite this, Dyson’s handling of the retrenchment, including the limited notice given to employees and its engagement with the union, has attracted significant public and union criticism.

Insufficient notice sparks union and public criticism

The United Workers of Electronics and Electrical Industries (UWEEI), which represents Dyson’s employees in Singapore, criticised the company for providing only a one-day notice before the retrenchment exercise.

UWEEI confirmed that it had been informed of the layoffs on 1 October, a day before they were implemented.

The union expressed disappointment, stating that the short notice left little time to engage with Dyson or support the workers before the exercise began.

While most of the retrenched workers fell outside UWEEI’s formal representation under its agreement with Dyson, the union escalated the issue to MOM for further review.

MOM responded by noting that because the affected employees were not unionised, the one-day notice to the union was legally permissible.

The ministry clarified that in cases involving unionised workers, companies are expected to give the union a month’s notice before retrenchments, allowing time for joint efforts to assist affected staff.

However, MOM acknowledged that giving early notice is “good practice” and builds trust between employers and unions, suggesting that Dyson’s failure to do so had eroded goodwill.

Despite these explanations, the public reaction has been largely critical, with many calling for a review of MOM’s retrenchment guidelines.

Critics argue that current laws allow companies to fulfil their obligations on paper while offering minimal protection to workers in practice.

MOM’s position draws criticism for being outdated

Dyson’s compliance with existing laws has not quelled the backlash, with many questioning whether MOM’s retrenchment framework is outdated.

One social media commenter noted, “It’s unfortunate that MOM’s mandatory layoff notice timeline is quite primitive and outdated, allowing corporations to execute retrenchments before MOM and the union are informed. This is not how tripartism works.”

Other critics have highlighted that the short notice period effectively limits any meaningful intervention by unions or employees, calling for reforms to increase the mandatory notice period.

“The one-day notice should be reviewed and banned. It should be done three months in advance, not one day. One day is no different from silent termination,” commented another individual.

Dyson’s retrenchment also underscored the lack of mandatory retrenchment benefits in Singapore, with some commenters pointing out that companies are not legally required to offer such benefits.

While Dyson did provide retrenchment benefits in line with the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment—offering benefits to both long-serving and shorter-term employees—many feel that the broader legal framework allows for too much flexibility, leaving workers vulnerable.

Retrenchment process raises concerns over corporate transparency

The retrenchment, which became public in early October, was part of a surprise move by the UK-based technology company, catching many off guard.

Dyson had previously reassured employees in Singapore that its operations, which serve as its global headquarters, would not be impacted by a global restructuring.

However, layoffs were confirmed to have affected staff in the manufacturing and procurement departments, creating unease among workers and raising concerns about the company’s transparency.

Media reported that the layoffs were conducted discreetly, with affected staff receiving email notifications for one-on-one meetings with human resources representatives.

During these meetings, employees were informed that their roles had been made redundant.

One laid-off worker described the process as “surreal,” noting that colleagues quietly packed up their belongings after receiving their notices.

The layoffs took place just three months after Dyson assured its Singapore-based workforce that local operations would not be impacted by its global restructuring plan.

These assurances had followed job cuts in July 2024 that affected 1,000 positions in the UK, further fuelling anxiety among employees in Singapore.

Some employees expressed concern that further retrenchments could be forthcoming, citing the company’s previous phased layoffs as a precedent.

While the total number of employees affected by the October retrenchment remains undisclosed, the layoffs have had a visible impact on workplace morale.

According to one employee, “No one knows if more cuts are coming next week. People are shocked and have low morale.”

This uncertainty has been compounded by Dyson’s reluctance to provide detailed information about the layoffs or future restructuring plans.

Dyson’s defence and ongoing discussions on labour protections

Dyson defended its actions by stating that the company is adjusting its team composition to better align with future growth plans.

A Dyson spokesperson reiterated that the firm remains committed to Singapore and its ambitions in the region, despite the retrenchment.

The company confirmed that affected employees would be offered career support, including outplacement services and counselling, but it declined to provide specifics on how it intends to assist laid-off staff.

MOM’s defence of Dyson’s retrenchment process has sparked calls for reform, with many urging for stronger protections for workers in such scenarios.

In response to the public criticism, MOM has indicated that it will engage with NTUC and the Singapore National Employers Federation (SNEF) to review the implementation of Section 30A of the Industrial Relations Act.

This section allows unions to represent executives individually in retrenchment cases, even when they are not covered by a collective agreement.

As discussions continue, it remains to be seen whether the controversy surrounding Dyson’s retrenchment will lead to meaningful changes in Singapore’s labour laws, or if the issue will remain a flashpoint for critics of current retrenchment practices.