About 18,000 employees of MTR Corp will have a pay freeze this year for the first time since 2003.
The freeze came after the rail operator issued a profit warning on Tuesday, with an expected net loss of about HK$400 million in the first half, compared to a net profit of HK$5.5 billion a year ago.
In a letter to employees, MTRC chief executive Jacob Kam Chak-pui said the freeze was "a very difficult decision" and made after considering "the macro environment and unprecedented challenges."
Revenue from train services, station commercial businesses and MTR malls is down due to the pandemic, he said.
"With the ongoing restrictions in cross-boundary and international travel, and the negative economic and market sentiment, our business will likely need a very long time to recover," Kam said.
"Our top priority is to protect jobs and to ensure business sustainability in the midst of a crisis."
But an MTR spokesman said a performance award would be given to outstanding staff members that is equivalent to one to two thirds of their basic monthly salary. They will also get a discretionary award equivalent to 1.1 month of basic salary.
The company will also grant a one-off special award to employees from the entry level to managers of up to 30 percent of their monthly basic salary. Senior management will have a pay freeze and no awards.
Unionists were unhappy about the pay freeze and left a meeting with the management early yesterday.
The chairman of the Hong Kong Federation of Railway Trade Unions, Lam Wai-keung, said: "The company had a surplus of more than HK$10 billion last year but still decided to have a pay freeze. Now our colleagues are worried that there will be a pay cut next year if the company suffers a loss."
The Hong Kong Railway Workers General Union said employees were disappointed.
Although the company expected a net loss in the first half, the union believed the company is still financially sound as there is profit coming from real-estate projects in the second half of the year.