Defence and aeronautics major Godrej & Boyce have decided to cut salaries for its senior management team. It has also announced partial salary deferrals for its junior employees.
The coronavirus outbreak and the nationwide lockdown has had a significant impact across industries.
"The board of directors of Godrej & Boyce believe that certain measures including salary reductions for our senior management team and partial salary deferrals for our junior employees for a period of six months will position G&B for stronger post-lockdown business recovery," said Godrej & Boyce in a statement to CNBC-TV18.
Godrej family members, who are whole-time directors of Godrej & Boyce, will not be taking a salary for this year, said the company.
Pay cuts will not be uniformly applied across the organisation, but will be graded. "Highest cuts will be for the leadership team and lowest cuts for the junior-most," said Anil Verma, ED, and President, Godrej & Boyce in an internal letter to employees.
"All of us are witnessing demand and supply-side shocks. The revival of the economy will be slow, especially for our categories linked to discretionary spends, capital investment budgets, and demand from govt customers," said Verma.
In this situation, the company is working on conserving resources and managing cash flows to honour commitments to all external parties.
Business units and corporate functions are reviewing their fixed costs in these challenging times.