KUALA LUMPUR: Salary cuts, reduction of fixed monthly allowances and unpaid leave are among the austerity measures being instituted by Berjaya Corporation Berhad and its subsidiaries due to the Covid-19 pandemic.
The company's executive chairman Tan Sri Vincent Tan said in order to sustain the group which has been adversely affected owing to the temporary closure of its core businesses following the imposition of the Movement Control Order by the government, certain business units might need to be downsized and this could involve the retrenchment of "surplus staff."
"In order to sustain the Group, the group management is convinced that certain austerity measures need to be taken to conserve the Group's cash flow and to ensure the continuance of profitable operations post-Covid-19 period," he said in a memo dated April 20.
The austerity measures for all companies under the group on employees with a combined monthly basic salary of RM6,000 and above (inclusive of monthly fees/allowance fees) were effective from April 1 this year until June 30 and would involve:
* salary reduction and reduction of fixed monthly allowances effective April 1.
* unpaid leave effective May 1.
The group in its website describes itself as a diversified entity engaged in among others, consumer marketing, direct selling and retail, hotels, resorts, vacation timeshare and recreation development, gaming and lottery management, food and beverage, motor trading and distribution, telecommunications and information technology-related services and products.
Berjaya Corporation Berhad is reported to have 16,000 employees.
Tan went further to elaborate on the measures which would be adopted for employees at the company's corporate office and Berjaya's subsidiaries for those earning a combined monthly basic salary of RM6,000 and above.
He also stated that the percentage of the salary reduction would hinge on the employee's salary range bracket.
"The above austerity measures," Tan said, "are necessary to ensure business continuity for the Group and to mitigate or avoid any further drastic measures to be taken, which could include closure of more business units, further downsizing and retrenchment exercises."
He reminded all companies under the Group to continue in their efforts to trim operational costs and reduce unnecessary expenses and suspend any intended or budgeted capital expenditure or investments, in order to ride out the present economic downturn.
"The group management," Tan added, "is committed to discontinue the above-mentioned austerity measures and would evaluate the re-instatement of the salary and monthly allowances upon assessing the status recovery of the Group's businesses and revenue to the pre-Covid-19 level performance, in due course."
He said that should the group's businesses and revenue fail to recover primarily due to a further extension of the MCO, the austerity measures may be extended.