Several conglomerates promised on Friday they would not cut salaries of their staff and were not considering layoffs in the wake of the coronavirus pandemic, which threatens to push the global economy into recession, leaving millions out of work.
“I will cut my salary to zero before a single employee is laid off,” Rajiv Bajaj, managing director and chief executive officer of Bajaj Auto, said in a TV interview. The Aditya Birla group, the Vedanta group, and the Essar group also promised not to cut any jobs or salaries of their staff.
Tata Sons Chairman N Chandrasekaran said the group companies would ensure full payment to temporary workers and daily wage earners working in its offices and sites in India for March and April. They would get remuneration even if these workers were not able to work due to either quarantine measures, site closures, plant shutdowns, or other reasons, he said.
The assurance from India Inc top leaders came after IndiGo, the country’s largest airline, announced hefty pay cuts for the senior management, while the Apollo Tyres promoters, Onkar Kanwar and Neeraj Kanwar, announced a 25 per cent cut in their remuneration. GoAir has already sent 80 of its expat staff home.
A Mahindra spokesperson said a pay cut by promoters and CEOs will certainly be considered, if the situation warrants.
H M Bangur, managing director, Shree Cement, said that in the trying times like these, business could take a back seat and the safety and lives of people were of utmost importance. “We have taken various steps for the safety of employees. It is not right to talk about business, profit and loss, revenue in times like these. I am not saying that the focus on business will not be there, but it will become important as the Covid-19 threat recedes,” he said.
Sources said while Emami was putting in place a contingency plan, it was not considering any pay cut.
Paytm CEO Vijay Shekhar Sharma said “inspired by Arne”, he would not take his salary of “this month and next”. “I commit that money to any needs of Paytm office help-staff in these testing times,” he said. Sharma was referring to Marriott International CEO Arne Sorenson, who announced that, in light of the financial impact of Covid-19 on Marriot and the hotel industry, he would be giving up his salary for the rest of 2020. Pankaj Patel, chairman of Cadila Healthcare, said the company had no plans to either cut jobs or introduce any temporary pay cuts for its staff. “This situation is temporary and would pass. In business, there will be both profit and loss. We cannot take knee-jerk reactions to a crisis situation,” he said.
Marico Chairman Harsh Mariwala said a company's response to the crisis and job cuts would depend on the sector and the challenges it faced. “Industries such aviation and hospitality are seeing significant headwinds at this point in time. It is a question of survival of corporations within these industries. I don't think a business house can take a unilateral decision in this matter. All factors will have to be taken into account,” he said.
The salary and job cuts are likely in the high-risk services sector, including airlines, hotels, malls, multiplexes, restaurants, and retailers, which has seen a sharp fall in demand due to shutdowns across the country. If the current global and domestic economic slowdown persists, it will impact demand and realisation.
The CEO of an airline said job cuts in the aviation sector was most likely as it was the hardest hit.
With inputs from Dev Chatterjee, Viveat Susan Pinto, Sohini Das, Shally Seth Mohile and Avishek Rakshit