India’s third largest two-wheeler manufacturing company, TVS Motor Company recently announced that it has decided to cut employees salaries for a six month period due to the decline in revenue amid the coronavirus lockdown.
The company’s Chief Executive Officer KN Radhakrishnan communicated the decision to employees on May 23. With the recent announcement, TVS becomes the first two-wheeler company to opt for salary cuts amid the growing crisis.
According to a statement by TVS, the company has decided to adopt a pay cut for all its employees starting from the month of May 2020 till October 2020. This is seen as a result of the significant fall in the company’s sales numbers due to the countrywide lockdown.
According to a statement released by TVS Motor Company, “In the wake of the unprecedented crisis, TVS Motor Company has rolled out a temporary salary reduction across different levels for a period of six months (May to October 2020). There will be no salary deduction at the workmen level. However, there will be 5 per cent salary reduction at the junior executive level and about 15 per cent to 20 per cent at the senior management level. It was heartening to see employees coming forward and offering to take salary reduction voluntarily.”
The lockdown has forced a near total halt in manufacturing and production, as well as retail sales of all automotive brands. In April 2020, TVS Motor Company registered zero sales in the domestic market, after a decline of 55 per cent sales in March 2020.
In the domestic two-wheeler market alone, TVS witnessed a massive 62 per cent decline in sales during March 2020. The company’s manufacturing facility in Hosur, Tamil Nadu was shut down since March 23, 2020 when the lockdown was first announced.
However, the company has said that employees voluntarily came forward and proposed a salary cut for a few months to tide over the problems caused by the pandemic.
Recently Bajaj Auto had proposed a salary cut across levels but the company later deferred the decision. Sources at Bajaj Auto said there are no plans to reduce salaries at this stage.
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