April, 8, 2020
The COVID-19 outbreak has created an unprecedented challenge to the world economy.
Companies across Sri Lanka are grappling with the sudden financial stress caused by the pandemic and taking measures to mitigate the inevitable blow it will have on businesses.
Leaders from some of the companies most affected by the pandemic are forfeiting their paychecks as the pandemic worsens.
From the airline industry to hotels to business firms, CEOs have announced that they are willing to take partial or full pay cuts.
On April 2, SriLankan Airlines said in a statement that it has implemented cost saving measures to ensure survival of national carrier and livelihoods of employees, including the mandatory salary reductions from the staff starting from 2.5% to 25% for a period of three months.
Other measures include; freezing all the salary increments to be implemented in the year 2020, and temporarily terminating operations from 8th to 21st April, 2020 with the exception of cargo services which have a direct impact in saving costs.
Premier blue chip John Keells Holdings (JKH) also announced a series of cost-cutting measures including pay cuts for Executives and freezing of new recruitment for three months to survive the impact of the ongoing new coronavirus (COVID-19) pandemic crisis globally and locally.
In a company-wide memo John Keells Holdings chairman Krishan Balendra stated that directors will take a 60% salary cut, and other executives will take a 35% salary cut. While travel allowances (excluding the loan deduction component ) will not be paid for the next three months.
These measures, Balendra said, would be in force initially for a period of three months (April, May and June) and will be reviewed in June as they monitor the situation as it unfolds.
Meanwhile, Sri Lanka’s biggest apparel exporter Brandix Lanka Ltd. (BLL) also divulged a number of cost-cutting moves, including pay cuts as high as 60% for executive cadre, and Board members foregoing compensation, as internal measures to manage the impact from COVID-19 pandemic.
In a memo to the staff, Brandix CEO Ashroff Omar said over the past few days, the Board worked around the clock to preserve cash and protect the company.
“Without committed revenues, we are compelled to take difficult actions and are required to cut significant costs out of our business,” he added.
Some of the decisions made include: BLL Board and CEO foregoing compensation for the next six months effective immediately; all executive cadre salaries being cut between 5% and 60% depending on salary levels; all capital expenditure frozen; all new contractors and consultants put on hold, and temporary staff discontinued; and all discretionary expenses deferred.