'Exit immediately': Delhi startup faces flak for asking employees to take 20-30% pay cut

A Delhi-based startup has stirred a hornet's nest after an employee revealed that they were forced to take a massive pay cut.

The employee, who works as a software engineer in the startup, revealed that another employee made a critical testing error that ruined a major order, costing their startup ₹2 crore. He said that to cover the loss, the company came up with a cost-sharing solution.

The employee wrote, "To cover the loss, management wants a cost-sharing split. They are asking employees for written consent for a 20-30% pay cut for the next 2 months, plus appraisals are on hold. In exchange, they are offering either ESOPs or a promise to repay the deducted amount later." 

The employee has 2 years of experience and has built the company's entire backend/tech architecture from scratch and currently leads a team of over 20 developers.

He mentioned that he has savings and can absorb the pay cut without financial stress. He asked whether he should simply refuse to take the pay cut or start interviewing elsewhere immediately. 

Soon after the post went viral, netizens were quick to identify how big of a red flag this was and why the Redditor shouldn't see his long-term future at the startup. 

"Not for you to bear. If your company is worth 90-100 crore, they should raise. The founders are just being chindi. Move if they make it an issue. Anyone who thinks this will anyways always short change the employees when the company makes it big," a user wrote. 

"If profits are not changing salary, then losses shouldn't change it either. Unless you want to be on 'good terms' with the higher-ups, there is no need," a second user said. 

A third user commented, "Time to find a new job." 

"This literally should come out of the founders' and upper management's paycheck, not the regular employees. If you have substantial stock options with the company, then it's understandable, but if not, then they're fleecing you for an issue out of your control," a fourth user weighed in. 

Another user commented, "Depending on your financial stability, get an exit immediately. There is no way you can plan a long-term future in here. Get an offer and dont give anything in writing."