COVID-19 Impact: TVS Motor Company cuts staff salaries by up to 20% for six months as sales plummet

TVS Motor Company has decided to reduce salaries at executive level, barring entry-level workmen, from May till October this year.

FP Staff May 26, 2020 13:30:28 IST
COVID-19 Impact: TVS Motor Company cuts staff salaries by up to 20% for six months as sales plummet

TVS Motor Company has cut staff salaries by up to 20 percent for a period of six months, beginning May, amid coronavirus pandemic.

The two-wheeler major has decided to reduce salaries at executive level, barring entry-level workmen, from May till October this year.

This decision has come due to the plummeting sales of the two-wheelers' company. "In the wake of the unprecedent crisis, the company has rolled out a temporary salary reduction across different levels for a period of six months (May to Oct, 2020)," a TVS Motor Company spokesperson told PTI. The spokesperson added that there will be no salary reduction at the workmen level.

Elaborating on the pay cut, the spokesperson said there will be 5 percent salary reduction at the junior executive level and about 15 to 20 percent at the senior management level.

TVS Motor Company, which is the third largest two-wheeler firm in the country, had resumed operations at all of its manufacturing facilities across the country on 6 Ma6.

The company has four manufacturing plants, three located in India (Hosur in Tamil Nadu, Mysore in Karnataka and Nalagarh in Himachal Pradesh) and one in Karawang, Indonesia. Besides catering to the domestic market, the two-wheeler maker also exports products to over 60 countries.

In April, the company reported a 55.5 percent decline in total sales in March at 1,44,739 units.

Click here to follow LIVE news and updates on stock markets

The company, which primarily makes two-wheelers and three-wheelers, had sold 3,25,323 units in March 2019, TVS Motor Company said in a statement.

"There has been a huge impact on the company's production and sales this month because of COVID-19 lockdown across the country," it added.

Total two-wheeler sales during the month stood at 1,33,988 units as against 3,10,885 units in March 2019, down 56.9 percent.

Domestic two-wheeler sales stood at 94,103 units last month as compared to 2,47,694 units in March 2019, a decline of 62 percent, it added.

Click here for Latest News on coronavirus .

Total exports declined 34.3 percent to 50,197 units last month as compared with 76,405 units in March 2019.

Other auto firms go in for pay cuts

In April, Bajaj Auto management had proposed salary cut for all employees with its MD Rajiv Bajaj himself to take 100 percent pay cut for the extended lockdown period till 3 May.

According to a letter sent by the company's HR department to employees, there is need to bring down fixed cost in the wake of the lockdown due to coranvirus pandemic, hence the deductions needed.

The letter from the HR department said: "We are extremely sensitive to the welfare of our workers and employees. If these deductions were to be made they would be fixed, balanced and measured and graded."

It further said,"the Managing director has decided to take the initiative if such a decision is implemented, he will not receive any salary during this period."

Automobiles and auto components production in the country is suspended since the imposition of the nationwide lockdown on 25 March, which was then extended to 3 May.

In March, a report in The Economic Times said, top management at Apollo Tyres had opted for a salary cut. Onkar S Kanwar, Chairman and Managing Director, Neeraj Kanwar, Vice Chairman and MD, announced a 25 percent reduction in their salary. The report said, the senior management in the organisation had also taken a voluntary reduction in their salary by 15 percent in a show of solidarity due to the rapidly deteriorating market conditions caused by the COVID-19 pandemic.

In mid-March, in an interview with CNBC-TV18, Vikram Kirloskar, vice chairman, Toyota Kirloskar Motor, and president, Confederation of Indian Industry said that he has written to all members requesting leaders to take a pay cut but not the employees.

--With PTI inputs

Updated Date:

also read

Taj Mahal to reopen two months after being shut down amid surge in COVID-19 cases
India

Taj Mahal to reopen two months after being shut down amid surge in COVID-19 cases

COVID-19 precautions mean visitors will not be allowed to touch the shining marble mausoleum, an Archaeological Survey of India official said

Coronavirus News Updates: 65-year-old woman tests positive for 'Delta Plus' variant in Madhya Pradesh, say officials
India

Coronavirus News Updates: 65-year-old woman tests positive for 'Delta Plus' variant in Madhya Pradesh, say officials

Coronavirus Latest News Updates: The woman, who has taken two shots of anti-coronavirus vaccine, recovered in home isolation, sources added. When contacted, Medical Education Minister Vishwas Sarang confirmed that a woman tested positive for a "different variant", but did not elaborate

Healthcare bonds, reforms in banking licences: What govt can do to finance fight against COVID-19
India

Healthcare bonds, reforms in banking licences: What govt can do to finance fight against COVID-19

Governments will have to create new ways of generating revenues and think of reforms that can help spur this investment