Paycuts in company - unclear why

ta2020

I'm curious to know how other IT companies are getting on with the subisdy scheme and paycuts.

Our IT company has handed out pay cuts/deferrals (still unclear) of 5 to 20% since March because of Covid-19. Some employees are getting the subsidy scheme AND being cut 15-20% of their wages. Our workload has not decreased, in fact we are busier than ever and working overtime. We have had no clear reason why we are being cut, other than vague responses of "delayed payments, and no new sales, etc". Even if that's the reason, I'm not sure how things got so bad so quickly. We have no clear indication as to when are wages will return to normal, or if we will get back our money from the "deferrals", or if there will be any more pay cuts.

I understand it's a tough time for companies in this pandemic but it's also tough for employees who are being cut pay and still working 50+ hours a week, with no compensation of reduced hours or days off, or reassurance of the future.

Are other companies more clear with their paycuts and offering any forms of compensation I wonder? Or are they able to give an estimate on when wages might return to normal?

Phoebas

ta2020 wrote: »

I'm not sure how things got so bad so quickly.

Companies are looking at their cash positions and taking preemptive action.

There is a recession on the way and new business is likely to be severely impacted, so companies are looking at the horizon, not just at how their books are looking right this moment.

NSAman

ta2020 wrote: »

I'm curious to know how other IT companies are getting on with the subisdy scheme and paycuts.

Our IT company has handed out pay cuts/deferrals (still unclear) of 5 to 20% since March because of Covid-19. Some employees are getting the subsidy scheme AND being cut 15-20% of their wages. Our workload has not decreased, in fact we are busier than ever and working overtime. We have had no clear reason why we are being cut, other than vague responses of "delayed payments, and no new sales, etc". Even if that's the reason, I'm not sure how things got so bad so quickly. We have no clear indication as to when are wages will return to normal, or if we will get back our money from the "deferrals", or if there will be any more pay cuts.

I understand it's a tough time for companies in this pandemic but it's also tough for employees who are being cut pay and still working 50+ hours a week, with no compensation of reduced hours or days off, or reassurance of the future.

Are other companies more clear with their paycuts and offering any forms of compensation I wonder? Or are they able to give an estimate on when wages might return to normal?

Welcome to the real world.

That job for life is a unicorn.

Creamy Goodness

I certainly wouldn't be working a 50+ week with a 20% pay cut. Guessing there's serious leakage of those hours wasted on micro-managing making sure you're actually "working".

I've been lucky that I haven't been affected by a pay cut yet but if they said tomorrow we need you to take a 20% cut, I'd be pushing for Monday/Friday off until things go back to normal and certainly would stop anything over the contracted 37.5 hour week.

thefa

Creamy Goodness wrote: »

I certainly wouldn't be working a 50+ week with a 20% pay cut. Guessing there's serious leakage of those hours wasted on micro-managing making sure you're actually "working".

I've been lucky that I haven't been affected by a pay cut yet but if they said tomorrow we need you to take a 20% cut, I'd be pushing for Monday/Friday off until things go back to normal and certainly would stop anything over the contracted 37.5 hour week.

I don’t think everybody has the implied job security/leverage to handle it in such a way, particularly in a job market which is unlikely to be flush with demand.

If the OPs situation continues for months and months with nothing changing, it would be one thing, but we’re not even out of lockdown yet and the potential economic hits haven’t been felt fully as mentioned by a previous poster so it could be best to keep the powder dry for now.

ta2020

Yes, Covid-19 is going to hit companies but to what extent. There are better ways to deal with this and communicate it to their staff. We were not told exactly how much we would be cut (between 0-20% was the group email sent around, no individual call or email), paycuts of 20% on top of the company using the subsidy scheme (this seems excessive), being told a day before payslips that further reductions will be given, no indication of what will happen after August when the subsidy scheme stops. Other companies are able to communicate this better and at least give some reassurance and clarity to employees. This is where the frustration comes from.

If the company is using the subsidy scheme, and also cutting salaries, then they are in bad shape. What sector are they in, if supplying say pub software the demand would be zero for several months I'd imagine. The next thing will be large chunks of staff fired, or the liquidators appearing onsite some random Tuesday. Time to look elsewhere. Software companies are famously prone to going under. If you're in software any length of time outside the multinational sector you will have seen several companies go under.

ta2020

Deleted User wrote: »

If the company is using the subsidy scheme, and also cutting salaries, then they are in bad shape. What sector are they in, if supplying say pub software the demand would be zero for several months I'd imagine. The next thing will be large chunks of staff fired, or the liquidators appearing onsite some random Tuesday. Time to look elsewhere. Software companies are famously prone to going under. If you're in software any length of time outside the multinational sector you will have seen several companies go under.

There was never any indication pre-covid that the company was in a bad position. Salary increases occurred most years and work is flowing. That been said, they're never totally transparent or clear on the future of the company, or how much profit is made per year. The cynical view would be that the company is making the most of this subsidy scheme and are finding ways to gain from it - it wouldn't surprise me. They've just handled this so badly - paycuts, no clarity, using the subsidy scheme AND working full time (as busy as ever for most of us). Very frustrating.

ta2020

ta2020 wrote: »

, using the subsidy scheme AND working full time (as busy as ever for most of us). Very frustrating.

Any company that can show Revenue a 25% drop in income/orders as a result of Covid is entitled to apply for the wage subsidy, even if the staff are kept on. It as introduced in an effort to keep people such as yourself in employment during the pandemic, who otherwise might be temporarily laid off. If the subsidy wasn’t there, and your company suffered that type of income reduction suddenly, lays offs would have been inevitable.

ta2020

ta2020 wrote: »

There was never any indication pre-covid that the company was in a bad position. Salary increases occurred most years and work is flowing. That been said, they're never totally transparent or clear on the future of the company, or how much profit is made per year. The cynical view would be that the company is making the most of this subsidy scheme and are finding ways to gain from it - it wouldn't surprise me. They've just handled this so badly - paycuts, no clarity, using the subsidy scheme AND working full time (as busy as ever for most of us). Very frustrating.

If they really are doing well then the last thing they would want to do is drive away hard to find devs with salary cuts. Unless they are morons of course. I've been on the inside of software companies and the only reason you cut pay is because you lose a big contract or sales fall off a cliff.

JimmyVik

ta2020 wrote: »

I'm curious to know how other IT companies are getting on with the subisdy scheme and paycuts.

Our IT company has handed out pay cuts/deferrals (still unclear) of 5 to 20% since March because of Covid-19. Some employees are getting the subsidy scheme AND being cut 15-20% of their wages. Our workload has not decreased, in fact we are busier than ever and working overtime. We have had no clear reason why we are being cut, other than vague responses of "delayed payments, and no new sales, etc". Even if that's the reason, I'm not sure how things got so bad so quickly. We have no clear indication as to when are wages will return to normal, or if we will get back our money from the "deferrals", or if there will be any more pay cuts.

I understand it's a tough time for companies in this pandemic but it's also tough for employees who are being cut pay and still working 50+ hours a week, with no compensation of reduced hours or days off, or reassurance of the future.

Are other companies more clear with their paycuts and offering any forms of compensation I wonder? Or are they able to give an estimate on when wages might return to normal?

Lots of IT companies are desperately hiring new staff even during the lockdown and very few are cutting wages. Might be better to put some feelers out and just jump ship than try to convince your current employer not to cut your salary.

ta2020

Dav010 wrote: »

Any company that can show Revenue a 25% drop in income/orders as a result of Covid is entitled to apply for the wage subsidy, even if the staff are kept on. It as introduced in an effort to keep people such as yourself in employment during the pandemic, who otherwise might be temporarily laid off. If the subsidy wasn’t there, and your company suffered that type of income reduction suddenly, lays offs would have been inevitable.

I understand the need for the scheme and how it works. It's more the frustration of the company not being clear on how good/bad they are doing financially and if they could roughly predict when things may or may not get better (i.e. what happens after august when the scheme stops). I'm sure they can predict how things might pan out based on sales/contracts/agreed payments etc, I know other companies are.

There is also the issue of working 5 days a week for 20% less pay. There has been no discussion about working 4 days a week, or any other incentives.

Deleted User wrote: »

If they really are doing well then the last thing they would want to do is drive away hard to find devs with salary cuts. Unless they are morons of course. I've been on the inside of software companies and the only reason you cut pay is because you lose a big contract or sales fall off a cliff.

Employees above the threshold for the scheme have been given cuts too. Good staff too. We've not had sales in the past and no cuts given. It's a product that will continue to sell and some sales were in progress as far as I know.

If payment stops from clients, then I'm not sure why we don't reduce our working hours.

JimmyVik wrote: »

Lots of IT companies are desperately hiring new staff even during the lockdown and very few are cutting wages. Might be better to put some feelers out and just jump ship than try to convince your current employer not to cut your salary.

I've shared my views with the company (and others too) so the feelers have been put out. No transparency or clarity in the way they are approaching this. If they tell us upright the reasons behind their actions, give us some incentives as compensation for the paycuts, be clear on how much we are being cut, for how long, then employees could at least have some empathy with the company and would leave us less stressed.

JimmyVik

ta2020 wrote: »

be clear on how much we are being cut, for how long, then employees could at least have some empathy with the company and would leave us less stressed.

Well i wouldnt believe anyting they say about that for a start.
I know many people who got temporary pay cuts in 2008/9 and they still havent got them back. Next year, next year, next year