KUALA LUMPUR: Sapura Energy Bhd's leadership team will take a 50 per cent cut in salaries with immediate effect.
The integrated oil and gas services provider said the salary cut was taken to mitigate the impact of the Covid-19 pandemic amid the low oil prices.
Sapura Energy president and group chief executive officer Tan Sri Shahril Shamsuddin said it would be imperative for leaders to take the hit to protect its employees.
"In the past year, we have done a lot of work to strengthen the company, including growing our top line and improving efficiencies in the way we operate," Shahril said in a statement in reference to his internal memo to Sapura Energy staff today.
He said the Covid-19 and low oil prices had impacted the company's financial strength.
"To sustain our business, we need to implement immediate austerity measures to preserve our cash flow," added Shahril.
He said the austerity measures included readjustment of employees' salaries between five per cent and 45 per cent across the board effective after Ramadhan.
He also warned that Sapura Energy would consider reducing its workforce.
"As a principle we will ensure those with lower income are less burdened by these cuts," said Shahril, while acknowledging the decision may be hard on many of the employees.
Shahril assured that the leadership had built an agile strategy to navigate Sapura Energy out of the current storm, which has adversely impacted its other businesses.
"The industry landscape will be tough moving forward but if we maintain our resilience, we will come out of this leaner and stronger," he said.