Primark has announced salary cuts for employees across the business, in a bid to prevent temporary layoffs or redundancies as a result of the economic impact of coronavirus.
The retailer has introduced a temporary 20% reduction in pay for senior executives, and a temporary 10% reduction for the remainder of employees across its headquarters and office functions for the coming 12 weeks.
The Primark leadership team is to take a temporary 30% salary cut.
Store managers and assistant managers, which account for around 200 of the 30,000 UK store staff, will have their pay cut by 20% from 6 April to 27 June.
The remainder of Primark’s UK store staff received their wages paid in full until April 5, at which point they were placed on to the government’s Job Retention Scheme and will receive 80% of their wages.
No bonuses are to be issued for this year.
It is also understood that head office staff. store managers and assistant managers have been asked to take 10 days annual leave from 13 April to 3 July. This will be paid at a full salary rate.
George Weston chief executive of Primark parent company Associated British Foods, ABF finance director John Bason and Primark chief executive Paul Marchant all requested a temporary 50% reduction in their base pay last week.
Paul Marchant, CEO, Primark said: “Our people are fundamental to the success of our business and we have not taken this decision lightly. By putting this temporary pay reduction in place, we are seeking to avoid the need for any other measures like temporary lay-offs or redundancy at this time.
”This is one of a number of steps we have taken in recent weeks to mitigate the impact of the £650m per month in lost sales due to Covid-19. We have informed suppliers that we will stop placing new product orders; engaged with landlords on our lease agreements; frozen recruitment; significantly reduced our discretionary capital and operating expenditure; and in many of our markets, we have had to furlough our store employees in line with the applicable local government subsidy scheme.
“I am very proud of our people and the resilience and dedication that they have shown in recent weeks as we navigate this uncharted territory. We have overcome many challenges in the past 50 years in business and we look forward to getting through this together and getting back to normal trading again as soon as we can.”