Many global cos take 90-day no-layoff pledge
A number of global companies – most with large presence in India – have assured employees that there will be no or insignificant layoffs while the Covid-19 outbreak and lockdown continue. Some have taken a 90-day no-layoff pledge. Some have put a stop to all layoffs for this year. Some are protecting jobs by reducing fresh hiring.
Among them are SAP, Morgan Stanley, Salesforce, Palo Alto Networks, PayPal, Citigroup, JP Morgan, Bank of America and Booz Allen Hamilton.
A JP Morgan India spokesperson said the firm recognises its people are critical to its success. “That is why we are consciously making decisions designed to prevent any new layoffs as a result of Covid-19, including significantly reducing hiring – in many cases stopping it completely – and working with local governments and officials,” the spokesperson said. Sources have previously told TOI that JP Morgan has 34,000 employees in India, its largest workforce outside the US.
SAP said it is committed to not making significant layoffs for 90 days. “We have our valued employees in our hearts and want to assure them that we have their backs as we deal with this health crisis now," a company spokesperson said. SAP India is estimated to have around 13,000 employees in India.
Morgan Stanley CEO James Gorman was quoted in the US media as saying that employees’ jobs would be safe this year. It has 3,300 technologists in India. Salesforce CEO Marc Benioff has pledged to do no significant layoffs for 90 days, Booz Allen Hamilton till July 1.
Palo Alto Networks CEO Nikesh Arora tweeted his commitment to no Covid-related layoffs “to allay concerns of our employees.” The company has over 7,000 people in California, Tel Aviv and India.
Arora tweeted about setting up a Covid Relief Fund. He said the company’s management and board would contribute $4 million. He also said the company would give four times the amount employees contribute. “Foregoing salary to contribute,” he tweeted.
Most companies have seen a dramatic reduction in business because of lockdowns around the world. That affects revenue immediately, but companies have to continue paying their workforces even though there is less work, and less profit.
Vijay Govindarajan, Coxe distinguished professor at Tuck at Dartmouth, said he is a firm believer in free markets and the process of creative destruction where weaker and inefficient firms fail, resulting in layoffs in those firms. But the current situation, he indicated, was different – a result of sensible government-mandated lockdowns. “Large companies like Google, Amazon, and Walmart must take the no-coronavirus layoff pledge and use their reserves to continue to pay employees, say, 75% of the salary and guarantee full health benefits,” he said.