Hindustan Coca-Cola Beverages (HCCB), Coca-Cola's company-owned bottling partner, is defying the current trend of salary cuts and layoffs by announcing a 7-8 percent increment in salaries to its direct employees. With this decision, 7,000 HCCB employees will see a jump in their salary packages effective April 1, 2020.
"The merit increase (annual increment) is for all employees of HCCB and a function of several factors including employee performance in the preceding year. We have followed the same compensation norms as in 2019," an HCCB spokesperson said in an email statement to Economic Times.
HCCB has 15 factories in India, which manufacture the aerated drinks under the brand names of Coke, Sprite, Thumps Up, as well as Minute Maid and Maaza juices. The current state of an economic crisis in India due to coronavirus lockdown hasn't diffused HCCB's annual increment, which comes as a relief to thousands of its employees.
HCCB had reported a profit of Rs 322 crore for FY19, but the lockdown's impact could be seen in the Jan-March 2020 quarter. Given that away-from-home channels represent approximately half of the company's revenues, the company expects the net effect of these consumer purchase patterns to have a significant impact on second-quarter results," Coca-Cola said in the earnings statement.
Economic slowdown in India
Ever since the country went under lockdown in late-March, businesses have taken a massive hit. With job cuts and salary reductions seen a general trend in different sectors, companies like HCCB and TCS refused to pass on the impact on its employees. But the decision is primarily due to positive earnings in the previous fiscal or quarter.
But the same time, the lockdown hasn't been favorable to the masses as dominating startups like Oyo, Udaan, Swiggy, Bounce, MakeMyTrip have all announced layoffs to cope with the economic crisis in the country. The airlines' industry also witnessed some harsh moves, as leading airlines announced layoffs or sent its employees on leave without pay.
India's lockdown is expected to be lifted on May 4, but there are reports suggesting an extension might be announced due to the rising number of coronavirus cases in the country. With more than 28,000 confirmed cases of coronavirus in India, 886 have been reported dead due to the virus. Even if the lockdown is lifted, things are far from getting back to normal.
