HCL announces salary freezes and bonus cutbacks for all employees
Treading the beaten track of global Information Technology peers, IT biggie HCL Technologies has also announced salary freezes and bonus cutbacks for its entire staff for the period 2009-10. Of late, salary freezes and cuts in variable pay have become a kind of “unwritten rule” with the IT companies for reducing pressures on operating margins.
As per a report in a business daily, HCL has informed its employees that the company intends ceasing salary-hikes for the financial year that would end July 31, 2009. The reasons cited for the proposed move include the tight demand in the US and Europe; plunging volumes; and the requirement for additional tightening of expenses across business divisions.
The harshest aspect of the announced move by HCL is that, beginning April 1, the company has lacerated retainer bonus, which averages 10 percent of an employee’s salary. Moreover, in most of the cases, travel allowance has also been cut sharply, though not curbed entirely. Among the other cuts are slashing of onsite allowances, as well as a proposed suspension of corresponding contributions to employee retirement plans!
Referring to the projected cuts, an HCL spokesperson said: “With increased focus on delivery excellence and operational efficiency, the strategy will enable the organization to find opportunities in the current environment and carry forward the growth momentum.”
