Pay pinch for PwC partners
Payments were stuck as clients were unable to make the payments on time because of the prevailing situation
- Published 28.03.20, 1:44 AM
- Updated 28.03.20, 1:44 AM
- 2 mins read
PwC, one of the ‘big four’ accounting firms, has decided on a 25 per cent pay cut for the partners and executive directors and deferment of promotions, increments and bonuses for all its employees in the country because of cash flow issues resulting from the coronavirus pandemic.
In an email communication, the company said it was profitable, but its payments were stuck as clients were unable to make the payments on time because of the prevailing situation.
It said the company had no plans for a pay cut across the board even as it will be freezing hiring in the current situation.
“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 include deferment of promotions, increments and bonus till a point in time one gets certainty around business,” Shyamal Mukherjee, chairman of PwC India, wrote on his LinkedIn post.
Sources said Deloitte India was considering pay cuts for senior executives but no decision has been announced so far. In a conference call, it was told that in the prevailing situation, partners and other senior executives would be asked to lower their earnings.
Experts feel India Inc should send across a message that it is its duty to provide a sense of security to the workforce by retaining its existing staff members.
Some have reportedly stated that the present situation is unique for employers and employees equally, but organisations should take a sympathetic and rational view towards their staff. For rationalisation of expenses, they suggested saving on expenses such as travel, bonuses and training that can save costs by 5-6 per cent, which can be used to avoid pay cuts and even ensure a reasonable hike next fiscal.
Steel major Tata Steel has conveyed to all its employees that salaries will be paid on time and there will be no disruption in the payments because of the lockdown. For its contract workers and vendors, including people on temporary projects, maintenance staff, cleaning staff, house.
keeping people and various other contract workers in its offices and factories, there will be no disruption in payment even though work has stopped.
“We have confirmed to the people that there will be no payment disruption. All salaries will be paid on time,” said Suresh Tripathi, vice-president – HR - at Tata Steel.
“We have told the vendors that even if they are on leave or their projects are on hold due to the lockdown or their work is reduced, that full payment will be made to everyone, irrespective of all work disruption,” said Tripathi.
IndiGo CEO Ronojoy Dutta had earlier announced a pay cut of up to 25 per cent for the senior level employees as the pandemic has hit the aviation industry hard.
In a recent report, the Centre for Asia Pacific Aviation India (Capa India) had said that the Indian aviation industry, excluding Air India, will incur losses worth $500-600 million in the Q4 of FY20 because of the coronavirus pandemic. Capa warned that if the government did not intervene, several Indian airlines will shut down operations by May or June because of a lack of cash.