Reliance Industries (RIL), which incurred a net profit of Rs 39,880 crore in 2019-20, announced salary cuts for employees in the hydrocarbon business which has been majorly hit due to the COVID-19 outbreak.

‘The hydrocarbon business has been adversely impacted due to reduction in demand for refined products and petrochemicals. This has of course put pressure on a hydrocarbons business necessitating optimisation and cost reduction across all fronts. The situation demands that we maintain a razor sharp focus on operating cost and fixed costs and all of us need to contribute to make this happen,’ Executive Director Hital Meswani wrote in the letter.

Employees earning more than Rs 15 lakh annually will get a 10 per cent salary cut, while the slash in salaries will be 30-50 per cent for senior executives and board members.

Mukesh Ambani, Chairman and Managing Director of RIL, will also forego his entire compensation for the year 2020-21.

This move by the Reliance Industries comes amid PM Narendra Modi constant advisories to the industry not to cut jobs even as companies struggle due to the crisis and the nationwide lockdown.

Reliance Industries has also deferred annual cash bonus and performance based incentives, paid in the first quarter of a fiscal year.

In FY20, the company spent about Rs 6,067 crore as the employee benefit expense.

RIL’s standalone revenues comprise of refining and petrochemicals businesses. For the company, the standalone employee expense for the March quarter stood at Rs 1,506 crore.

Experts have claimed that the savings of the company through a 10 per cent salary cut is insignificant as it may come around Rs 600 crore annually, which refers to a monthly savings of Rs 50 crore.

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