Employees of Reliance Industries (RIL) will be taking pay cuts, just as so many other firms across the country that have adopted cost-cutting measures amidst the ongoing crisis. While the senior executives will have their salaries reduced by 30 per cent to 50 per cent, those earning over Rs 15 lakh a year will face a 10 per cent cut .
Mukesh Ambani, chairman, RIL, will be foregoing his entire compensation. Employees earning less than Rs 15 lakh a year have been exempted.
The employees were told in an official letter that the decision to cut pays was taken in the face of the falling demand for refined products and petrochemicals, which has adversely impacted the hydrocarbons business. In order to focus on operating and fixed costs, and keep the business running, this move was considered necessary.
The annual cash bonus given to the employees has also been deferred. No performance-based incentives will be paid out either.
The Company has been reportedly using this lockdown period to plan a reorganisation of businesses and also digitalise its processes to ensure efficience and improve costs.
It is reported that the net worth of Ambani had fallen by $5.8 billion owing to the drastic drop in oil prices and global stocks amidst the pandemic. However, his position as the richest man in Asia was restored when Facebook bought a 9.99 per cent stake in the Group’s Jio Platforms for $5.7 billion (approx. Rs 43,574 crore). The collaboration between Facebook and Jio is expected to lead to a lot of tests and innovations for WhatsApp, given the fact that India has the largest community of WhatsApp users.
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The 10% pay cut is only for employees working in the Hydrocarbons business of RIL and not for entire RIL.