Coronavirus caused 30% of companies to cut workers' pay
55% of surveyed employers who cut pay said they avoided layoffs
Thirty percent of employers cut employee pay in response to the coronavirus pandemic, although some companies say they are ending pay cuts or even repaying employees what they lost, according to a survey released Monday from outplacement firm Challenger, Gray & Christmas.
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"It used to be that companies would do everything they could to avoid cutting pay. Now they try to avoid layoffs, which can hurt morale, lead to survivors' guilt, and create anxiety, with employees wondering who will be next," Andrew Challenger, Challenger firm senior vice president, said in a statement.
A worried man looks at an empty wallet. (iStock)
"At the same time, working from home may have fewer costs for employees, such as avoiding commuting expenses, so pay cuts could be more easily tolerated," Challenger said.
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Fifty-five percent of employers who cut pay said it allowed them to avoid layoffs, according to the cross-industry survey of 150 human resources executives at U.S. companies. The survey was conducted June 11 to June 20.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AON | AON PLC | 304.69 | +0.67 | +0.22% |
Many executives took pay cuts when the pandemic hit in March, including leaders at companies like AMC, Boeing and Cheesecake Factory. United Kingdom-based global insurance firm Aon is keeping in place a 50 percent temporary salary reduction for some executives but is repaying employees after cutting their salaries up to 20 percent.
Aon will "repay colleagues in full, plus 5% of the withheld amount" and will not lay off any of its 50,000 employees because of the coronavirus pandemic, the company said in an SEC filing.