Reliance Industries has cut the pay of employees by up to 50 per cent as the conglomerate battles lower profitability in wake of the coronavirus pandemic. The pay cuts were cited in a company note to employees dated April 29. Reliance Industries, headed by India’s richest man, Mukesh Ambani, has decided that employees earning more than Rs 15 lakh a year will face a 10 per cent salary cut, while senior executives will take salary cuts ranging from 30 per cent to 50 per cent. Employees earning less than Rs 15 lakh per annum will not see any reduction in their compensation.
“The hydrocarbons business has been adversely impacted due to reduction in demand for refined products and petrochemicals … the situation demands that we maintain razor sharp focus on operating costs and fixed costs and all of us need to contribute to make this happen,” executive director Hital R Meswani said in the letter.
“Our Chairman has agreed to forgo his entire compensation,” he added, referring to Mr Ambani.
Reliance Industries has also announced postponement of the annual cash bonus and performance-linked incentives, which are usually paid in the first quarter.
Reliance Industries is due to announce its quarterly results later on Thursday. The company said that it would consider its first rights issue in almost 30 years as part of its broader commitment to eliminating net debt by March 2021. Reliance Industries’ outstanding debt was about $43 billion at the end of last year.
Facebook this month revealed plans to spend $5.7 billion to buy a 9.99 per cent stake in Reliance Industries’ digital arm.
RIL shares closed 2.86 per cent higher at Rs 1,467.05 on the BSE.