Mexico’s state oil company is asking senior staff to take a voluntary 25% pay cut due to the effects of the coronavirus on global oil prices, which have tanked to below break-even levels.
In an April 24 email to upper management, Pemex asked deputy directors, managers and administrators to sign on to the salary reduction which would go into effect from now until December.
Those asked to agree to the reduction in salary typically make upwards of 100,000 pesos or US $4,000 per month. The email’s language asks them to affirm they are signing on to the salary reduction “voluntarily, without any fraud, pressure or coercion of any kind.”
Pemex is also cutting staff on its Gulf of Mexico oil rigs to reduce their risk of exposure to the coronavirus.
The embattled oil company is over US $105 billion in debt and recently saw its credit rating downgraded to junk status by both Fitch Ratings and Moody’s Investors Service, a move likely to trigger the sell-off of billions of dollars in bonds by investors mandated to hold assets of investment quality.
The salary reduction request comes in accordance with Mexican President López Obrador’s April 23 mandate that public sector employees agree to “joining and contributing to the austerity program to rescue Mexico’s sovereignty.”
The president is also shuttering 10 government departments, instilling a hiring freeze and eliminating Christmas bonuses for federal employees in order to help the country’s economy rebound from the coronavirus-induced slump.
Source: El Financiero (sp)