One of India’s largest Advertising Groups defers salary payment

In the email to its employees, the CEO wrote:
“The scenario is difficult with lockdown till May 3. What restrictions will remain after that is not known. All our offices are in cities that are designated red zones. A global recession is underway. The Indian economy is not likely to recover for a long time. Many clients are facing extraordinary difficulties. As per published reports, many companies have already reduced their employee costs in many ways. World Federation of Advertisers, based on a survey have stated that 80% of advertisers are deferring their campaigns and looking at significant budget cuts as well.

In such a background, our performance, like others, is expected to decline significantly in the year. Like all companies, we will review and curtail all the costs we can, to protect the organisation. In this light, we have still listened carefully to the feedback received. Keeping a positive outlook that things will be better in the latter part of the year, we have decided on the following steps:

  1. The quantum of deduction going forward will be reduced from the April cycle. (Example – If Rs 100 was deferred in March, this could be reduced to Rs 75 from April.) This will mean that most people will get a higher amount in April than they received in March. The exact amount for each individual will be communicated by the Finance head in your office by April 29.
  2. Point 1 will not apply to operations or groups where due to extraordinary decline, in some cases down to zero, the quantum of deduction & cuts will be determined on a case to case basis. 3. The quantum of deduction for the month of March will not be repaid or adjusted in April. The amount reduced in March will be carried forward and repaid when the business turns.

Employees will have to be on the rolls however to receive it.

  1. The reduced level of deductions that are being implemented from April will be reviewed continuously as we go forward. The environment is too uncertain for anything to be taken for granted now.
  2. April is a full month of lockdown. Cash flow will be poor as clients don’t have money. Therefore salaries could be paid on variable dates.

We are living in the most uncertain of times with no parallel. Let us hope that things turn around soon for the benefit of the entire world, the nation and all of us.
Meantime, please follow all instructions to stay at home and stay safe.

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