Survey of large companies reveals deep salary cuts
Up to 50 percent reduction in salaries was carried out by nine out of 30 large companies employing a combined workforce of 7,500 people, according to a survey by the Human Resources Association of Lebanon (HRAL).
Another ten percent of these companies are planning to reduce salaries by up to 30 percent.
Nearly 26 percent of the surveyed companies have laid off employees since October 2019. The proportion of laid off employees didn’t exceed 20 percent of the companies’ headcount.
Salaries with employment contracts in the local currency account for 58 percent of the companies surveyed. Those still paying salaries in dollar represent 27 percent of the total.
About 15 percent of the companies are paying salaries in lira at the official rate, while their employment contracts are denominated in dollar.
All companies participating in the survey have reduced employee benefits (see table). Most of the companies have halted recruitment. Hourly employment was suspended at 30 percent of the companies, while 24 percent have halted consultancy work.
Branches of international companies in Lebanon are supported by their global networks, according to Wael Hanna, General Manager of Expeditors International Lebanon branch which provides logistical services.
Companies that rely on foreign markets, and have bank accounts abroad will more likely survive, according to Tony Haddad, General Manager of Technica, an automation solution provider. He said that his company relies on fresh money to cover the payroll of 200 employees in dollar as well as other operational costs.
Data was collected from April 7 to May 14. The sample includes local, regional, and multinational companies in banking, services, pharmaceuticals, manufacturing, construction, food and beverages, and other consumer goods.
Reported by Gisele Khalaf
Date Posted: May 18, 2020