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Layoffs, salary cuts become new COVID-19 norms

Much needs to be done about the art of delivering bad news (salary cuts and layoffs) in the pandemic with dignity

Published: 26th May 2020 08:55 AM  |   Last Updated: 26th May 2020 08:55 AM   |  A+A-

For representational purposes

Express News Service

The COVID-19 outbreak has not only infiltrated our lives with lexicons such as ‘social distancing’, ‘asymptomatic’, ‘quarantine’, ‘PPE’, ‘comorbidity’, but also catapulted HR terms – ‘furlough’, ‘salary/pay cut’, ‘retrenchment’, ‘layoff’ – into becoming the new normal. This, despite the central and state governments’ advisory that public and private enterprises should not axe staff or cut salaries.

What’s more bizarre is the manner in which companies are conveying the bad news: ride-hailing app Uber fired 3,700 frontline workers over a 3-minute Zoom call; social commerce startup Meesho laid off 150 executives just days after assuring them their jobs were not at risk. Days after Labour Day, the UP government suspended 35 labour laws for three years to attract investment. Now, 10 other Indian states have relaxed labour laws; decisions that some call ‘reforms’, but central trade unions continue to protest.

Employees’ having to take the brunt of such measures is grossly unfair. So, choosing to be detached, abrupt or sneaky is bound to backfire, as evident from the testimonies on social media (Examples: This tweet from a senior journalist that became popular – “Got a call from my boss… Sacked after 24 years from a company I served with love for more than two decades”. When B2B ecommerce platform Udaan terminated 3,000 contractual staff without prior notice, disgruntled employees formed a Twitter handle @EmployeesUdaan to demand justice).

Such practices bring your company a bad name, employee morale is destroyed, future candidates/investors may rethink their choice, and so on. Now, if going against the tide – Asian Paints raising salaries or New Zealand’s PM Jacinda Ardern issuing a four-day week – seems impractical to your coffers, there are other ways to deliver the news.

“In tough times, be clear and upfront. It is very important that people are able to understand exactly what is being said, and nothing is lost in translation,” says Rajnarayan CHRO, Titan Corporate. Despite maintaining a good balance sheet, the business has taken a hit as their stores pan India closed during the lockdown, says Rajnarayan, yet “the brand continues to have essential regard for its staff”.

Throughout the lockdown, decisions to defer a few payouts, suspend annual performance bonus and salary increments, were communicated by team leads, HR heads, and managers to the staff, via video conversations. And, when employees had many doubts after one live session, their queries were collated and replied over one email to everyone. “When leaders lead from the front, people feel confident that their company is doing something for them for the right reasons.”

If the situation arises to trim her staff, Joshika Kapoor Piplani, Founder of One PR, says she will do it face-to-face, having once experienced a cold dismissal herself over a very abrupt email from a long-standing client. “I put in eight years of hard work to launch that brand from scratch, and they didn’t even have the decency to say ‘thank you for your services’. Piplani’s happy that her current crop of clients – a beauty brand, a life coach, a language school, and a makeup artist – have either paid their monthly dues or called/emailed her that they want a break in the pandemic from brand promotions and will resume her services later.

Cutting down on marketing is a tactic even Franke Faber India Pvt. Ltd has adopted to stall pay cuts and layoffs, says its Senior Director Marketing, Hardesh Chojher. “We are compromising short-term visibility to avoid manpower cuts and save livelihoods. We have also monetised perquisites such as medical insurance, canteen and bus facilities, so with this ‘cost-sharing kind of proposal’, the company doesn’t bear 100 per cent of the costs.” But if push comes to shove, it will be done over a Town Hall: “With everyone privy to the same information, everyone believes they are contributing towards re-strengthing the company.” If you issue salary cuts, Chojher offers two suggestions: Mention the timeline on the pay cut so “people must know it is not a loss of income forever,” and accurately gauge how big the gap is to meet your 2020 targets, “because you don’t want to first issue a 30 per cent cut, then realise the gap is bigger, and raise to it 50.”

While conveying such news, Rup Kumar Sengupta, founder and principal consultant, Rachis-HR, says it is good etiquette to reiterate important points: “‘Over communication’ never hurts, but ‘under communication’ seriously mars any relationship.” Using the lockdown as the reason to not intimate an employee personally is pure apathy, feels Sengupta, listing the options the pandemic has made us all experts in: “Zoom, House Party, WhatsApp or video call…you have no excuse.”

Apart from the joining date delayed indefinitely, offer letters have been revoked in this pandemic. With campus recruitments, you are barred from applying to other organisations when you receive an offer letter, so those opportunities are lost. So, while the student looks for alternate employment in this pandemic, 1-3 months salary can be paid as an honorarium depending on how deep your pockets. “Remember, they are your tomorrow’s brand ambassadors.”

With no government intervention on rent, taxes, and salaries, NRAI (National Restaurants Association of India) predicts that 4 out 10 restaurants in India might never reopen post lockdown. To circumvent this, generate sales and pay the staff, many restaurants have started contactless dining products, delivering groceries, DIY meal kits, etc. Even if these efforts fail, stick up for your employees to the very end, suggests Anurag Katriar, head of NRAI. However, ‘intent’ and ‘capability’ are two different things, he opines. “I may have intent, but not the resources to fulfill it. So, if you can’t pay full salaries, at least pay your staff enough to keep their kitchen fires burning. If you can’t do that either, please do the severance in a civilised manner.”

Katriar has issued one clear advisory to all NRAI member restaurateurs – “Don’t stop communicating with your employees”. He himself sends regular video messages to his 650-staff of DeGustibus Hospitality; all in Hindi and range from the emotional (“we are trying to take care of you”) to the practical (checking who can survive on their PF account and therefore be retained on furlough). Pre lockdown, when Katriar shut two loss-making institutes, he paid the affected staff one month’s salary, gave them “100 per cent freedom” to use the notice period to find another a job, and even made a few recommendation calls. “If needed, I will do this again but definitely never over an email that reads, ‘your services are not required from tomorrow’.”

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  • nahal

    western crimes is being paid off from above.
    2 months ago reply
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