Coronavirus: Auto firms cut salaries, stop increment as sector takes a hit
BusinessToday.In April 17, 2020
Bajaj Auto, TVS Motors and several other auto companies have decided to cut salaries of their employees in order to tide over the coronavirus crisis. Bajaj Auto MD Rajiv Bajaj has said that he would not be withdrawing a salary during this period. On the other hand, Apollo Tyres CMD Onkar Kanwar and vice-chairman Neeraj Kanwar will take 25 per cent cut in FY21. Besides, employees are also not likely to receive the annual increment this year.
Auto sector is one of the severely impacted sectors in the country pushing firms to opt for cut salaries instead of laying off employees to survive during the pandemic.
According to an Economic Times report, Bajaj Auto has reduced pay for April. Bajaj Auto has said that it is not looking to lay off employees but is opting for pay reduction instead. "There is definitely a likelihood of pay cut for the period of lockdown. We are reviewing the situation frequently and will finalise the quantum and timelines for payment in due course," Bajaj Auto executive Director Rakesh Sharma said.
TVS Motors has also deferred increments of its employees indefinitely. Ashok Leyland might also announce a wage cut across its board members.
Most auto component makers have paid March salaries. However, in April, there might be a slew of announcements on pay cuts to manage cash flow challenges in the auto industry.
Prime Minister Narendra Modi had also urged companies to not fire employees due to coronavirus lockdown. "Be kind to people who work with you in your business, your industry. Do not expel anyone," PM said.