However, certain companies in the cash-rich IT and software services sector have announced additional payouts for a section of their employees during this time of crisis. (File Photo)
With the 21-day mandatory lockdown in place starting to have an impact on cash flows, companies across India have started sending out mails to their employees, explaining the impact and the near term plan.
A cab aggregator, which had already laid off nearly 500 employees in one go in December and was expected to further lay off an equal number of people in the next three months by March, is likely to continue letting go people even after this month, some of the employees The Indian Express talked to said.
A food delivery startup — which mostly operates cloud kitchens — also sent a mail to its employees, telling them there could be a pay cut between 20 to 50 per cent for April, owing to the current circumstances wherein the cash flow and liquidity in hand are limited.
The company, however, assured employees it would not be axing any jobs in the near term. A call on the payment of salaries docked in March and April would be taken as and when the situation improved, the startup said in its mail.
Two of the big four accounting firms have expressed also concerns about the impact of COVID-19 on their cash situation to their employees, with one of them suggesting a likelihood of a pay cut and another announcing it for partners and executive directors.
A Mumbai-based accounting firm has decided to defer hikes and bonuses for all employees, along with a hiring freeze for the next fiscal starting April 1. A 25 per cent pay cut has also been communicated by the company for partners and executive directors.
In a LinkedIn post, Shyamal Mukherjee, chairman and territory senior partner at accounting company PwC India, said “We at PwC India have initiated proactive measures that will help navigate the uncertainties, keep all employees safe and make our organisation more sustainable. We have worked out some interim measures which includes deferment of promotions, increments and bonus till a point in time one gets certainty around business.”
Airlines, which are one of the worst hit sectors by COVID-19, were among the first to announce pay cuts across the board. In an attempt to protect its cash flows. India’s largest airline IndiGo announced up to 25 per cent salary cuts across the board, including for its CEO. Similarly, GoAir, in an effort to cut down costs, extended its salary cuts to all its employees for the month of March. Full-service carrier Vistara cut employee salaries by around 10 per cent, in addition to asking some of its staff to go on leave without pay.
National carrier Air India, too, has frozen recruitment and induction, in addition to implementing 10 per cent deduction in allowances, excluding basic pay, house rent allowance and variable dearness allowance, for all employees, except cabin crew, for a period of three months effective March 2020 savlary.
However, certain companies in the cash-rich IT and software services sector have announced additional payouts for a section of their employees during this time of crisis. Cognizant told its employees last week it would be paying an additional 25 per cent of their base salary in April.
This policy, which is likely to cover almost two-thirds of Cognizant’s Indian staff, is applicable for employees who are at associate level or below. Similarly, Facebook has announced an extra $1,000 for all of its 45,000 employees for managing expenses in the wake of the COVID-19 outbreak.
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