During the pandemic, when organisations were laying off employees or deducting their salaries in trying to battle the financial burden, around 200 employees of Gravity Payments collectively volunteered to take pay cuts to avoid any layoff. The CEO himself took zero salary and intends to continue doing so for at least a month.
As the financial situation of the fintech firm has now improved, Dan Price, CEO, Gravity Payments, feels the time is right to pay back these employees for their good deed.
Gravity Payments has used the Company savings, available debt, as well as its recovering income to repay the staff. On an average, each employee got about $4,300 in back pay.
In March and April, the credit-card processing company, mainly servicing small businesses, experienced a drastic dip in revenue.
In March, when it became quite clear that losses were going to be massive and the Company may have to resort to downsizing to stay afloat, the voluntary pay cuts came to the rescue. Not only were the employees able to save their jobs, the Company was also able to sustain itself.
However, some employees could afford just a 5 per cent reduction, while some took a 30 per cent cut, and yet others were able to let go 50 per cent of their salary, depending on their financial condition.
This voluntary pay cut saw 98 per cent employees participating, with ten employees volunteering to forego their entire salary. In total, an amount of $750,000 was saved.
While the Company had lost about 55 per cent of its client base, its merchant base has now recovered. Presently it is just 20 per cent less than it was before the outbreak.
Clearly, Gravity Payments was able to recover by adding more clients during the pandemic than ever added before. So, not only were the employees taking home reduced salaries, they were putting in extra work to fulfill the increase in demand.