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across the board 25% wage reduction - trouble in techland


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My company was thrown into chaos today as a 25% pay cut was imposed - take it or basically leave... no consultation - was imposed. 

Beyond that, 60% of staff still on furlough. We work in tech - and were thought to be relatively immune. Anyone else seeing blanket wage cuts like this? 

Ours will last for 12 months (at least) if we're luck enough to keep our jobs - most won't be. How will this impact mortgage access for those already with mortgages? 

We are not in an obviously vulnerable sector - the disruption has knocked us over - supply chain, cash flow, gov projects, private sector, and so on. It's just turned to shit. 

Edited by gruffydd
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21 minutes ago, gruffydd said:

My company was thrown into chaos today as a 25% pay cut was imposed - take it or basically leave... no consultation - was imposed. 

Beyond that, 60% of staff still on furlough. We work in tech - and were thought to be relatively immune. Anyone else seeing blanket wage cuts like this? 

Ours will last for 12 months (at least) if we're luck enough to keep our jobs - most won't be. How will this impact mortgage access for those already with mortgages? 

We are not in an obviously vulnerable sector - the disruption has knocked us over - supply chain, cash flow, gov projects, private sector, and so on. It's just turned to shit. 

That's what you get for electing a populist party of the most inept magnitude on a single ticket issue.

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58 minutes ago, gruffydd said:

My company was thrown into chaos today as a 25% pay cut was imposed - take it or basically leave... no consultation - was imposed. 

Beyond that, 60% of staff still on furlough. We work in tech - and were thought to be relatively immune. Anyone else seeing blanket wage cuts like this? 

Ours will last for 12 months (at least) if we're luck enough to keep our jobs - most won't be. How will this impact mortgage access for those already with mortgages? 

We are not in an obviously vulnerable sector - the disruption has knocked us over - supply chain, cash flow, gov projects, private sector, and so on. It's just turned to shit. 

Sorry to hear that mate.

IT security is allegedly going big with the work from home drive / trying to secure everything.

But also know a couple of dev firms that just axed loads of PMs and the contractors.

What field of IT / region ( DM if W Mids) and will see if hear anything to suitable roles amongst friends - think hiring freezes though. We just canned our grad programme and recruitment apart from QA sadly

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1 hour ago, gruffydd said:

My company was thrown into chaos today as a 25% pay cut was imposed - take it or basically leave... no consultation - was imposed. 

Beyond that, 60% of staff still on furlough. We work in tech - and were thought to be relatively immune. Anyone else seeing blanket wage cuts like this? 

Ours will last for 12 months (at least) if we're luck enough to keep our jobs - most won't be. How will this impact mortgage access for those already with mortgages? 

We are not in an obviously vulnerable sector - the disruption has knocked us over - supply chain, cash flow, gov projects, private sector, and so on. It's just turned to shit. 

Sorry to hear that. 

Two friends have had similar experiences, one worked for BA expected.. And another one of the major builders as a senior engineer. 

As others have said one would hope there are other opportunities with your skillset. 

Reference mortgages, you will need to provide your last 3 paychecks as evidence. So if your pay is reduced it will be that salary x 4.5 

Edited by captainb
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Sorry to hear that, didn’t think they could do that but I suppose they will have checked it with legal.  One friend was made redundant in IT recently, not heard of others and actually it sounds like a lot are busy.  

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20 minutes ago, satsuma said:

Sorry to hear that, didn’t think they could do that but I suppose they will have checked it with legal.  One friend was made redundant in IT recently, not heard of others and actually it sounds like a lot are busy.  

It's not legal in the UK, but the only route to pursue is a claim for constructive dismissal. 

https://www.localsolicitors.com/employment-guides/can-my-employer-reduce-my-wages

That's assuming the staff are paye. If the are self employed contractors they will have to take it on the chin. 

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Sorry to hear that and best of luck with however you choose to deal with it. 

Sadly it's not that much of a suprise. I could feel these stories coming.

I mentioned on another thread the roles recruiters who have been in contact recently are indeed paying around 25% less then pre-pandemic levels. If we assume that this applies to our own companies recruitment, then it's not much of a stretch to the next step of 'take it or leave it' for current employees, harsh as it might be.

Yep, it's short sighted, and will lead to all sorts of issues, but regardless of whether you're an underperformer or overperformer the fear factor will mean not much choice..

I'm rather worried about this blanket approach, because my own salary has grown to way more than 'market rate' if looking at title/role alone.

It's justified on an individual level - and is great value compared to us colleagues - but if it all went tits up, it's almost impossible to demonstrate that value if it came to it in a two hour interview in a sh1tty job market elaewhere. 

I'd expect 'tell him he's dreaming' to be the response if I tried to match my current salary anywhere else, even after a 25% cut.

Silver lining is hopefully this will play out slowly into the housing market....

 

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11 hours ago, gruffydd said:

My company was thrown into chaos today as a 25% pay cut was imposed - take it or basically leave... no consultation - was imposed. 

Beyond that, 60% of staff still on furlough. We work in tech - and were thought to be relatively immune. Anyone else seeing blanket wage cuts like this? 

Ours will last for 12 months (at least) if we're luck enough to keep our jobs - most won't be. How will this impact mortgage access for those already with mortgages? 

We are not in an obviously vulnerable sector - the disruption has knocked us over - supply chain, cash flow, gov projects, private sector, and so on. It's just turned to shit. 

Im not techy, so forgive my ignorance, but is this because companies who pay for IT systems/upgrades are simply mothballing projects and just making do with what they've got? So demand for IT experts has reduced, because the only work is critical maintenance?

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Sorry to hear the news @gruffydd, there has been a similar edict with the permys at my place.

 

@satsuma As far as legalities are concerned, it looks to me that "they" can do what they like with wages in such an existential crisis.

 

I have posted elsewhere that we will get DEFLATION for a period followed by INFLATION once the VI's realise it. Printing will be one of their favoured modes of escape.

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Surely you can adjust to 25% pay cut by removing those frothing lattes, avacado toast, and making do without the latest iphone.

That should protect your Landlords and Banks from any Deflation.

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16 hours ago, gruffydd said:

My company was thrown into chaos today as a 25% pay cut was imposed - take it or basically leave... no consultation - was imposed. 

Beyond that, 60% of staff still on furlough. We work in tech - and were thought to be relatively immune. Anyone else seeing blanket wage cuts like this? 

Ours will last for 12 months (at least) if we're luck enough to keep our jobs - most won't be. How will this impact mortgage access for those already with mortgages? 

We are not in an obviously vulnerable sector - the disruption has knocked us over - supply chain, cash flow, gov projects, private sector, and so on. It's just turned to shit. 

Is this full-time or contracting?

You cannot, legally, do this with full-time employees.

If you have 60^ of staff on furlough then they need to look what staff the company needs.

Im assuming furlough means furlough i.e. not working from home.

And Id start with management and HR that came up with the daft idea.

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4 minutes ago, spyguy said:

Is this full-time or contracting?

You cannot, legally, do this with full-time employees.

I

You can fire all employees and re-employ them on a lower wage. My university has threatened to do this and legal advice unions got was that this is in fact legal to do.

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24 minutes ago, msi said:

Surely you can adjust to 25% pay cut by removing those frothing lattes, avacado toast, and making do without the latest iphone.

That should protect your Landlords and Banks from any Deflation.

That is another way of working around it.......cut back, share, store and make do and mend....then should all start to get better.;)

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9 minutes ago, MancTom said:

You can fire all employees and re-employ them on a lower wage. My university has threatened to do this and legal advice unions got was that this is in fact legal to do.

You can fire an employee.

Or you can make the job redundant .

To fire an employee you need a good reason, good enough that youd not want to re-employ the,

To make a employee redundant, then employ them at a lower rate, you can expect to have your **** sued off.

Most sensible companies tend to offer separation packages,. which tend to cost ~1/2 months per year employed. Far cheaper than a employment tribunal.

If the orignal's poster has 60% of staff furloughed then they've got their 25% reduction of wages iin the bag. Just a matter of picking the 15%

A company cannot have its cake and eat it - 25% reduciton in wage costs with the same number of staff.

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Yes I expect that you are entitled to at least severance pay if you were to be rehired. Not that it would be much I'm my case or in the bare minimum requested from the law (1 week per year worked) 

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Doesn't sound good. It could be that parts of the UK tech industry (not the security side as mentioned) could be hit from two directions. First, a drop in demand from other sectors who've been hit by covid. And secondly, more outsourcing to EE or Asia, as companies take on board the lessons of WFH.

Make hay while the sun shines. 

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42 minutes ago, Freki said:

Yes I expect that you are entitled to at least severance pay if you were to be rehired. Not that it would be much I'm my case or in the bare minimum requested from the law (1 week per year worked) 

No.

If you are made redundant, then rehired again then the company risks being sued.

The job is redundant not the person.

Any HR person with the slightest bit of employment law training will not recruit for a redundant position.

You have to change the position in a way that would stand up in court.

Or offer people severances rather than redundancies.

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35 minutes ago, Trampa501 said:

Doesn't sound good. It could be that parts of the UK tech industry (not the security side as mentioned) could be hit from two directions. First, a drop in demand from other sectors who've been hit by covid. And secondly, more outsourcing to EE or Asia, as companies take on board the lessons of WFH.

Make hay while the sun shines. 

Size of the EE tech sector is tiny.

Anyone who thinks they can outsource to EE and save money is nuts.

Look at car manufacturing. EE wages have been rising at a rapid clip


https://www.ft.com/content/2c3c46ac-ef6f-11e9-ad1e-4367d8281195



Wages are rising sharply elsewhere. In the Czech Republic, where unemployment stands at a measly 2 per cent, gross wages rose on average by 8 per cent last year while output per worker inched up only 1.5 per cent. Workers at Skoda, the Volkswagen-owned automaker that alone accounts for 7 per cent of Czech gross domestic product, were awarded a 12 per cent wage increase.

Audi workers in Hungary secured an 18 per cent pay rise this year after a short strike at a plant that is the largest producer of engines in Europe disrupted production at the carmaker’s factories in Germany. Nominal hourly labour costs have increased by more than 10 per cent in the last year in Hungary, Slovakia, Romania and Bulgaria.

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18 hours ago, MonsieurCopperCrutch said:

That's what you get for electing a populist party of the most inept magnitude on a single ticket issue.

zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

8 hours ago, micawber said:

But wage cuts are extreme and indicate that this is a whole new ball game in terms of crashes. 

The same thing happened in 2008 - buy 2012 - 13 things were on the up again

2 hours ago, spyguy said:

You cannot, legally, do this with full-time employees.

BA have done/are doing it

2 hours ago, spyguy said:

A company cannot have its cake and eat it - 25% reduciton in wage costs with the same number of staff.

If the company is going to go bust people have a choice to make - keep a job at 75% of have no job

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1 hour ago, spyguy said:

Size of the EE tech sector is tiny.

Anyone who thinks they can outsource to EE and save money is nuts.

Look at car manufacturing. EE wages have been rising at a rapid clip


https://www.ft.com/content/2c3c46ac-ef6f-11e9-ad1e-4367d8281195



Wages are rising sharply elsewhere. In the Czech Republic, where unemployment stands at a measly 2 per cent, gross wages rose on average by 8 per cent last year while output per worker inched up only 1.5 per cent. Workers at Skoda, the Volkswagen-owned automaker that alone accounts for 7 per cent of Czech gross domestic product, were awarded a 12 per cent wage increase.

Audi workers in Hungary secured an 18 per cent pay rise this year after a short strike at a plant that is the largest producer of engines in Europe disrupted production at the carmaker’s factories in Germany. Nominal hourly labour costs have increased by more than 10 per cent in the last year in Hungary, Slovakia, Romania and Bulgaria.

Yup. We are in the fortunate position that UK wages are not a fortune, but a relative bargain these days. It's not 2006/2007 where $2 == £1. Plenty of Indian engineers making comparable salaries to low/mid UK too, as well as EE. No point offshoring if zero to arbitrage.

Doesn't mean companies won't try the cut tactic, and good luck trying to find external offers to leverage for pay rises.

I would be more concerned if I was in the bay area....those salaries are nuts and highly at risk of offshoring/cuts etc.

Mind you, if you've been resting and vesting for a couple of years, if you're smart about saving/investig you're basically set for a long long time..

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