US-based engine manufacturer Cummins is temporarily cutting salaries in response to lower demand caused by the coronavirus crisis, according to the company’s latest update.
Chairman and CEO Tom Linebarger will be taking a 50% cut in his salary, while there will be a 25% reduction in director compensation.
All other employees in the US will see their salaries shrink by between 10 and 25%, while their working hours are also shortened.
Linebarger said, “The impact from the pandemic on the global economy has been sudden and is growing, and it is imperative for us to respond quickly to maintain our strong financial position.”
The company said it will be taking similar actions outside the US based on local regulations and collective bargaining obligations.
These reductions in pay are intended to be a temporary measure; the company will continue to monitor business conditions closely and reassess the programme at the end of the second quarter.
“These are difficult but necessary actions and I know they will have a real impact on the lives of our employees and their families,” said Linebarger. “I appreciate their understanding and support as we work through these challenging times together.
“I want to thank our employees for their continued commitment to ensuring our customers receive the products and service they need to provide essential support to the global economy.”