Wednesday, September 24, 2008

news heard on the street.....

Fidelity has announced a 10% pay cut for all its employees, across all
brands (Fidelity, Chicago, Ticor..) for 6 months.


alameda said...

I heard that executives are taking a 20% cut, and all other employees get the 10% cut. All employees have been asked not to discuss the cuts outside the companies. I don't understand that- isn't a move like this usually used to increase investor confidence?

Diane Cipa said...

I would think so Almeda, but maybe they don't want folks outside the company to know that they need to take these kinds of measures.

I think it's a good move on Fidelity's part. Face it. A smaller salary is better than a layoff from the perspective of an employee and this gives Fidelity a chance to keep good employees rather than chance losing them.

This is all about managing survival through a tough market. Temporarily cutting salaries is a forward looking manager's choice.

alameda said...

This is an old dispute- cutbacks for all vs. terminations for a few. It seems to me that you ordinarily you would cut people you think you can do without, to make sure you will keep the people you really want. I think that Fidelity is doing this because it knows that with all the recent layoffs, nobody in the TI industry is hiring, so they can cut everyone's salary and not have to risk resignations. It wouldn't work without the horrible employment outlook for title people right now.

Diane Cipa said...

Agreed, completely, but aren't all reasonable management decisions made based on today's reality?

I can't fault Fidelity. I think they're playing this one correctly. I have had to make similar choices, first full layoffs, then partial layoffs - off and on as needed.

I haven't had to cut salaries but I did completely eliminate our bonus program last year and those bonuses were significant portions of annual earnings.

You do what you have to do to make certain the company survives. If it doesn't, no one has jobs.