Qinetiq has defended its decision to implement a sweeping pay freeze this year, despite making a £127m profit in 2008.
The Public and Commercial Services Union (PCS) is up in arms about the defence technology company’s decision. The union has claimed the firm is using the recession as an excuse to cut costs, despite the group’s underlying operating profits having shot up by £21m from 2007 to 2008.
But a spokesman for Qinetiq insisted the company was operating in an unprecedented economic slowdown and has had to take action.
He told Personnel Today: “The economic environment is very different now to the way it has been over the past few years. It is naive to think that you can continue with generous annual pay rounds when the economic conditions have shifted markedly.
“Like many other companies we are looking at the way we operate. We are entirely upfront about the fact that this is to do with our costs going forward.”
Qinetiq has attracted controversy since it was privatised in 2003, after chief executive John Chisholm saw his personal investment of £10,000 increase to £26m on flotation of the company three years later.
Mark Serwotka, PCS general secretary, said: “The announcement will do nothing for the morale of staff who have seen senior executives make millions out of the controversial privatisation of Qinetiq.”
The Qinetiq spokesman said there would be no redundancies at the firm this year. In November 2007, 300 people were made redundant because of restructuring following the privatisation of the firm.
He said: “We’ve not announced another redundancy round and there are no plans I am aware of for redundancy at this stage.”