A number of major employers nationwide are cutting salaries in an effort to cope with the financial fallout from the COVID-19 pandemic.
In the insurance world, Principal Financial and Aon announced they are reducing salaries for a percentage of their workforce.
Principal said it is cutting salaries for 23% of its global workforce to "mitigate and manage" the economic and market fallout from COVID-19, the Des Moines (Iowa) Register reported. Principal employs about 18,000 people worldwide and 6,500 in Iowa. The pay reductions range from 7.5% to 25%, depending on the employee's role.
Jane Slusark, Principal spokeswoman, told the Register the company has cut "non-people related expenses." But "due to persisting economic conditions and uncertainty," she said, Principal is now taking additional measures to keep "expenses in line with expected revenues."
The company also is asking some of its U.S. workers if they would be interested in volunteering to move from full-time to part-time employment. Slusark said Principal is not laying off workers as a result of the economic impact of COVID-19.
Aon announced temporary salary cuts of 50% to its named executive officers in response to COVID-19. In addition, 70% of Aon’s global workforce will have their salaries reduced by 20% while about 30% of Aon’s staff will see no salary reduction.
Aon said it would not lay off workers during the COVID-19 crisis.
In addition to the payroll actions, Aon said it will cut spending on contractors and discretionary expenses not related to client service and pausing a share buyback plan.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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