It has been communicated to my husband that his company is going to be exploring salary reductions for the next fiscal year (starting July 1). Management had communicated this about a month ago at an all-staff meeting, but assured everyone that they were going to try to cut everything else that they could before staff. Following the meeting, management made several tough decisions to abandon projects that they knew would impact expenses but not provide a proven return. They have also taken a hard look at other operational costs. But recent communication has made it clear that there will be some form of staff reduction, beginning with salary reductions and probably layoffs. This is not a frivolous company – they are tight and smartly run non-profit arts organization. So it hasn’t been a matter of bad money management – just think how many times in the last month you have thought to yourself “I have some extra money to spend on a ticket to a live performance” – right. No one else has either.
They were originally looking at three options for reducing personnel costs:
- Across the board salary reductions
- Reducing the company contribution to employee pension plans
They found out that they cannot furlough exempt staff without changing their job status to non-exempt, so that is now off of the table. It looks like there will be a 5% (ish) cut to one or both of the other two.
Normally, this would seem slightly catastrophic to us as we have already made about all of the cuts that we can in light of our situation and what we are trying to accomplish in the next three years. However, because of our new budget and our grasp on our financial situation, this does not seem insurmountable at all – we will be able to adjust and figure out what to do to make it work. I’m also very hopeful that my raise will help us to even out a little bit – I should know by next month.