KUALA LUMPUR: Austerity measures have begun to take effect at Tan Chong Motor Holdings Bhd and Berjaya Corporation Bhd, two major corporate groups among local corporates who have tightened their belts to cope with the national shutdown of public activities.
Documents sighted by Bernama show that salary cuts, enforced staff leave, and partial closure of offices are among measures being taken.
Tan Chong independent directors have offered to reduce their fees with immediate effect while senior management employees will also be taking salary cuts of between 20% and 30%.
Non-senior management employees will also undergo salary cuts of between 3% and 15% based on their total monthly basic salary plus monthly fixed allowance, according to their grade level.
According to the document, Tan Chong group president Tan Heng Chew said the group will review the measure periodically until the situation returns to normal, and additional measures might be announced to sustain the business if the situation is prolonged or worsens.
He said the group’s businesses in Malaysia have been greatly affected by the movement control order which began on March 18.
The group also envisaged that its business operations in Indo-China will also be impacted as various lockdown measures are being imposed by the authorities, while the impact on social economic activities will last for a period of time to come.
Tan said although government assistance has been given to small and medium-sized enterprises and some industries, Tan Chong group, however, has not been able to leverage any of the assistance or support.
Pay cuts, staff furloughs, partial closing at Berjaya
Berjaya has taken a more comprehensive approach by implementing austerity measures from April 1 to June 30 for all companies in the group.
The exercise entails pay cuts, the percentage of which is to be based on the employee’s salary range bracket, and a reduction of fixed monthly allowances.
The group has also required employees to take unpaid leave or annual leave every Friday from May 8-June 30, and the offices of Berjaya subsidiary companies will be closed on three Fridays a month until June 30.
According to the memo, Berjaya executive chairman Vincent Tan said the group management would discontinue the austerity measures and evaluate the reinstatement of the salary and monthly allowances once the group’s business performance recovers to the levels prevailing before the Covid-19 crisis began.
However, the austerity measures may be extended if the national shutdown continues or the group’s performance does not recover to previous levels, he said.
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