Hacker News Reader

Comment by runamok | Hacker News Reader

I have heard about companies doing this in times of economic downturns to prevent layoffs. If that was the cause and it was communicated as such and temporary I'd be willing.

Example: https://www.independent.co.uk/news/business/news/toyota-staf...

View on HN

In Germany this is known as "Kurzarbeit" (literal translation: short work). The company reduces the work hours of employees and the pay gets cut proportionally. The cut hours will be paid by the state at a rate of 60% (67% for workers with children, the rate is the same as unemployment).

So if a worker's hours get cut by 50%, they still get paid 80-83.5% of their wage. The company can choose to get the employees' pay back to 100% if they pay the difference, which sometimes happens if the hours are cut because there is not enough work and not because the company is in financial distress.

This helped quite a lot of companies to stay in business during COVID.

That's not the same. This one is a pay cut while maintaining the same hours.

Kurzarbeit is specifically for the industry ("Fertigung") so that the large production sites can survive when they're not getting enough orders to put everyone to work.

I admit that it's been heavily misused during Corona though, as every large corporation wanted to legally steal a little money from the state.

Not sure that I'm right, but I have the impression that for companies that are strongly driven by "shareholder vale" (like Intel as it appears), if before the pay cut it is thought that cutting jobs would give a net benefit (again in terms of shareholder value only), shortly after the pay cut they will think so again/still think so, even if the pay cut was justified by being able to avoid layoffs in this way.

Reply on news.ycombinator.com