The ₹1,500-crore auto engineering components division of the Amalgamations Group has proposed a graded, across the board, temporary pay reduction for its executives until it sees some stability, said a top official.
“Currently, there is a lot of volatility and uncertainty in the market place. In keeping with the trend in the industry, we have also proposed a graded pay reduction across the board until we are able to see some stability,” said Ram Venkataramani, managing director, IP Rings Ltd., a part of the auto components division of the Amalgamations Group.
Asserting that the market downturn and the circumstances surrounding COVID-19 had forced many companies to adopt digital and automation practices that are expected to yield some productivity gains, he said employees have to adapt to the changing expectations from customers and the organisation in order to continue to succeed.
The division has about 500 senior level executives and the temporary pay reduction will be in the range of 5% to 20%.
Regarding lay offs, he said: “We will try and keep the headcount reduction to a bare minimum except for such areas where inefficiencies are very high. As of now, we are operating with minimum staff.”
The company has also put on hold its expansion plans for FY21.
According to him, the company will start monitoring the situation literally on weekly, monthly and quarterly basis and then take a call on its capital expenditure programme.
“Given the uncertainty in the market place, we are being extremely cautious and have put our capex plans on hold and [are] literally going on a quarterly basis now as the situation is so volatile and uncertain. If there is some strategic capex, we will look at it but only if we can survive that quarter,” he said.
“We have new product lines that we are working on which would help us not only for BS VI but even in the era of electrification. So, all of those now will probably go a little slow till we are able to steady the ship,” he said.
