Two and three-wheeler giant Bajaj Auto is planning to implement a pay reduction across the board for all its employees till May 3 for the period of the lockdown, as per a report in CNBCTV18. The managing director of the company, Rajiv Bajaj has taken the lead and said he won’t draw his salary during this period. It is reported that the company’s employee union has given its consent to such a move.
The information has been conveyed to all the employees through a note from the company’s HR department. The note explains that there is a need to reduce fixed costs during this forced shutdown due to the COVID-19 pandemic. It does not mention how much will be the quantum of pay reduction, but it will be implemented across the board for all employees from top to bottom. It may fix some percentage or a certain number of days. The company has no plans to lay off its employees.
Bajaj Auto HR department’s note then points out how other companies in the automobile sector are already implementing cost-cutting measures including salary reduction etc. Some of the measures include withholding salary increases and bonuses to employees, freezing all expenses which are capital in nature and cutting down on the marketing budgets. The company says its own financial position is sound and it may not need to resort to any drastic measures. The voluntary reduction in salaries for a limited period may offer some solace to the company’s finances where no production and no sales are happening.
The final decision on this may come through in the next few days. The government has said some industries can resume production after April 20. There are many conditions attached to this relaxation as well. If the factory does reopen for production, the overall impact on employees may be less.