[scary-size]

> They chose to cut salaries rather than cut the office rent and catered lunch/snack expenses

Real-estate is surprisingly hard to get rid of. Depending on the size they might be stuck with a multi-year lease. Cutting snacks and lunch doesn't substantially change the equation.

That said, I'd start looking for another job. Layoffs AND a paycut for those that remain doesn't fit well. Might as well layoff more people and keep the others "happy".

[folivore]

People here earn enough for the food to not be on their radar. I guess the office/food is symbolic, though I do understand real estate is hard to get rid of. They could rather have taken on the debt and kept good people (pure speculation, I have no idea).

It's hard to Guage overall morale since we're split into segregated teams per project so there isn't much intersection outside of the dead Slack server.

[bruce511]

>> They could rather have taken on the debt and kept good people

Nope, this would be a really bad approach. Let's leave aside the issue of _getting_ debt - banks are likely to be reluctant to offer debt to a business that is strugelling.

Taking on debt though to pay for staff you can't afford from revenue is only useful if the issue is cash-flow related. If the issue is income related then taking in debt is bad for the business, and bad for employers.

If the salary bill is too high then it has to come down. One way is to shed jobs. Those affected are affected 100%. Those unaffected are unaffected 100%.

The other way is salary cuts. Everyone is affected 90%. Which is better depends on which side you are on.

Some employees want to stay enough that they'll take 90%. Others will jump ship. If you have a job to go to, and you want to go, then go. That will free up 100% of your salary for the others.

Of course they know what happens if you don't sign. They're not morons. I'm surprised you even asked. The scenarios are obvious;

A) business goes under. All employees get nothing. Or B) another round of layoffs. (but this means severances, so may not even be possible) or C) enough people sign to lower the salary bill enough, but not you - you get to keep 100%. (this may not be ideal for your future raises etc) D) you quit.

I don't know your company, or your bosses, so I can't speak to their motives. But the fact they are asking for this suggests that the margin between success and failure is narrow. Like 10% narrow. They are offering you the opportunity to share pain, rather than cut more jobs.

At this point the ball is in your collective court. Feel free to leave. You might just be doing everyone a favor.

[andrewwalker]

Agreed!

Think of it from the employer's perspective, if they're coming to the team with this proposal, it's likely they see a difficult financial Outlook. (Either that, or the management feels it's time for a culture reset)

I can only speak for myself, but I don't think many people enjoy the prospect of having to do a layoff. But sometimes it comes down to that or winding down the company, to me, in such cases, the choice is obvious.

pay reductions, are of course suboptimal, but they remove the need to spend a whole lot of time and money recruiting to rebuild a team once things turn around, so it's a sensible play from the employer perspective.

If it were me, I'd consider if I was motivated enough by the work independent of financial compensation to want to stay part of the organization, if so I'd consider taking the pay decrease but I would definitely push to for some future recognition that I took the risk for the good of the team. Ideally in writing.

[izacus]

Real estate is also really cheap in comparison to actually paying people, especially in some areas with long-term deals.

[folivore]

I am unsure if 10% cut would be covered by dropping an office. The area is very affluent and exclusive. Note that it is a pretty small company.

[bruce511]

Whether it would help or not is irrelevant. You can't just "drop an office" - that's not how offices work.

It's likely, even probable, that the landlord has already been squeezed for rental drops - certainly most folks did that during covid. To drop the office means waiting until the next lease expiry - leases are typically 5 years long, so figure a year or two away at least.

[ilyt]

Well, depends, if now more than half of your company isn't in office after COVID and move to WFH I can see it being a pretty big part