Coronavirus impact: Companies decide to cut salaries and perks2 min read . Updated: 21 Mar 2020, 03:55 PM IST
- State-run Air India has announced reduction in allowances of executive pilots, cabin crew and officers
- Apollo Tyres, announced that its top management will take a cut in compensation
NEW DELHI: Even as Prime Minister Narendra Modi appeals to businesses to protect jobs in the face of the coronavirus pandemic, Indian corporates have started cutting salaries and perks.
Though the brunt is being borne by senior executives, lower-paid employees are also facing the heat. While Modi’s appeal on Thursday was directed more at protecting poorer workers, others have also been feeling the pinch after a prolonged slowdown.
State-run Air India, facing a sell-off, has announced cost-cutting measures like a reduction in the allowances of executive pilots, cabin crew and officers.
The airline has withdrawn executive entertainment allowance from executive pilots, reduced the layover allowance for cabin crew and decreased fuel reimbursement allowance for officers.
“Keeping in view the financial position of the company in the wake of recent global development, a need is felt to take steps to contain costs as far as possible," said an Air India circular.
Though the circular is dated 17 March, an Air India employee confirmed that the move remains effective. The airline’s spokesperson was not available for comment.
On Friday, one of India’s largest tyre manufacturers, Apollo Tyres, announced that its top management will take a cut in compensation, in the range of 15% to 25%. The move was put down to a significant decline in business due to the outbreak of coronavirus in important markets like Europe, North America and India.
Chairman Onkar Kanwar and vice-chairman Neeraj Kanwar will take a pay cut of 25%, each, while the senior management will likely have to take a 15% reduction.
“Apollo Tyres has a diversified and multinational presence and the pay cuts will affect all senior management at the global level. Coronavirus is impacting sales and profitability across the automotive industry as anticipation builds that the worst is yet to come with Covid-19," the company said in a statement.
IndiGo, India’s largest domestic airline, will cut salaries of a section of employees as the pandemic has curtailed travel demand.
“With a great deal of reluctance and a deep sense of regret, we are therefore instituting pay cuts for all employees excluding Bands A and B, starting 1 April 2020," IndiGo’s chief executive officer (CEO) Ronojoy Dutta said in an internal email.
A spokesperson confirmed Dutta’s email but declined to elaborate. Bands A and B are the lowest paid staff in IndiGo.
On Tuesday, budget airline GoAir asked a section of its employees to go on short leave without pay. PTI reported that the airline has also terminated contracts of expat pilots amid curtailed operations.
Though the aviation sector appears to be the worst hit, other businesses are also trying to slash costs amid tapering demand. It is not just senior executives who are impacted.
Prasid Banerjee and Suneera Tandon contributed to this story.