The salary cuts at Tata Group, approximately 15-20 percent, only for senior roles, Vice President level and above
Tata Sons and the group companies are exploring 15-20% salary cuts for the senior management to optimize costs as the coronavirus outbreak hits businesses across the group.
The decision was taken at the Tata Sons’ board meeting on 5 June. The salary cuts are ranging approximately from 15 to 20 percent, only for senior roles, vice-president level and above, across Tata Sons and the group companies, the report said.
According to CNBC Report, the pay cut may vary across group companies.
- At TCS, the pay cut is expected to be around 15-20 percent.
- At Tata Chemicals, Tata Consumer, and Indian Hotels (IHCL) the salary cut will likely be as much as 20 percent.
- At Tata Steel and Tata Motors, pay cuts maybe 25 percent.
- At Tata Power, the pay cut is expected to be between 15-25 percent.
The pay cuts are applicable on the base salaries for 2020-21, and performance-related component of the compensation will not be impacted.
According to the CNBC report, “Tata Sons’ senior management will take 15-20% pay cut. But, as a company, it has a strength of about 200 employees, so the impact will be nominal. The group companies, where the cost-cutting measures are needed and individual companies will have to get this passed through their remuneration committees and boards. The appraisal cycles and bonuses for Tata Sons and group companies may also be deferred. But no job cuts have been envisaged at this point,”
“Tata Sons does not want the pay cuts to impact employees at the mid to junior level and they definitely want to save any impact on jobs. Salary cuts at the top level will not only save a significant amount of capital but will also reduce the impact on junior employees in a lower salary bracket;” said in the report.
However, Tata Sons declined to comment on cost optimization at the group when contacted by Media.
