India's Reliance Industries has cut the pay of employees by up to 50%, according to a company letter, in wake of the coronavirus pandemic.
Mumbai: With coronavirus lockdown hitting businesses hard, India’s largest company Reliance Industries has decided to cut the salary of most of its employees by 10 to 50% with the firm’s chairman and richest Indian, Mukesh Ambani, agreeing to forgo all his remuneration.
The board of directors and all other senior executives of the company will take a 30-50% reduction in their salaries, RIL said in an internal note to its staff. Employees in the oil and gas unit earning over Rs 15 lakh per annum will take a 10% pay cut; those below this threshold will remain unaffected.
Also, the oil-to-technology conglomerate has deferred annual cash bonus and performance-linked incentives that are normally paid in the first quarter, according to an employee communique.
According to RIL’s annual report for 2019, Asia’s richest man Ambani’s annual compensation stood at Rs 15 crore. It has remained unchanged since 2009.
“The hydrocarbons business has been adversely impacted due to reduction in demand for refined products and petrochemicals. This has, of course, put pressure on our hydrocarbons business necessitating optimisation and cost reduction across all fronts,” RIL’s internal note said. “The situation demands that we maintain razor sharp focus on operating costs and fixed costs and all of us need to contribute to make this happen."
The nationwide lockdown that began on March 25 had led to evaporation of demand as factories shut down, offices closed, air flights suspended, trains stopped and restrictions on the movement of people and goods placed.
Reliance’s hydrocarbon business was adversely impacted due to a reduction in demand for refined products and petrochemicals.
On Thursday, RIL shares rose 2.60% to Rs 1,464.00 apiece on the National Stock Exchange while the benchmark Nifty 50 gained 3.21% to end the day at 9,859.90 points.
Last Updated 1, May 2020, 12:45 PM