Companies struggling to retain staff face tough choice: Slash 401(k) plans, cut salaries or furlough workers?

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With no revenue coming in and government relief frequently tied up in red tape, businesses across America are weighing bleak options to stay afloat, and shedding costs wherever possible — from slashing pay to cutting staff or paring down benefits.

Fiat Chrysler, Ford and GM all told their employees that they would temporarily cut 20 percent of their salaries. The auction house Sotheby’s announced pay cuts in early April. Even the hospital industry is cutting salaries. Pullman Regional Hospital in Washington told its staff that their salaries will be cut by 25 percent over the next 60 days to make $1 million in cash available immediately for operations.

Prior to the coronavirus shutdowns, unemployment had been at a 50-year low, forcing many companies to offer better perks to attract and retain talent in a job seeker's market. Now, those benefits — such as higher contributions to employee 401 accounts — are first on the chopping block as companies try to cut costs and minimize layoffs.

During the 2008 financial crisis, mainly smaller companies reduced or suspended 401 contributions, Thompson said. By July 2009, Fidelity found only 8 percent of its companies had suspended their matches. For furloughed workers, who are temporarily unemployed with reduced pay, life seems even more precarious. Retail associate Wendy, who asked that her last name not be used, is one of roughly 7,000 workers furloughed by Michael Kors in response to the pandemic. Wendy will only get a fraction of what her co-workers will receive because her pay is complicated by her military service. She’s now deciding between waiting for unemployment, finding a new job, or waiting to return to work.

 

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you missed profit

Us just wants to save the stock market

I know a solution

It looks like the media can report on both, Coronavirus AND the economy. So why give Trump shit, when he simply brings up the need to balance health and economic needs? Let me guess... FakeJournalists

Hey but the fed is pumping trillions into the stock market so hedge fund managers make out like bandits.

Open back up.

Up in Canada, citizens are receiving their $2000.00 per month payments. Most have received almost $5000.00 because it's retroactive. That's right America, $2000.00 per month.

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Small business layoffs jump 1,000% in MarchAfter a decade of job growth, small businesses quickly resorted to layoffs, furloughs and slashed employee hours in order to survive the economic fallout from COVID-19. DontBailOutWallStreet This is ridiculous! Maybe in a country where there is public healthcare and universal income they can afford to shutdown over a hypothetical curve. We have private health and we live paycheck to paycheck. Mr. Trump is the current captain our our ship. He is responsible for being unprepared whether he knows it or not. Blaming other is weakness.
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