Burberry directors take 20% pay cut and 'won't use furlough scheme'

Money will be donated to help struggling communities during coronavirus

Burberry has announced a temporary 20% cut to directors’ pay and said it will not rely on the government’s coronavirus job retention scheme for employees unable to work during the Covid-19 crisis.

In recent days the UK has seen a sudden sharp increase in Covid-19 infection numbers, leading to fears that a second wave of cases is beginning.

Epidemics of infectious diseases behave in different ways but the 1918 influenza pandemic that killed more than 50 million people is regarded as a key example of a pandemic that occurred in multiple waves, with the latter more severe than the first. It has been replicated – albeit more mildly – in subsequent flu pandemics. Until now that had been what was expected from Covid-19.

How and why multiple-wave outbreaks occur, and how subsequent waves of infection can be prevented, has become a staple of epidemiological modelling studies and pandemic preparation, which have looked at everything from social behaviour and health policy to vaccination and the buildup of community immunity, also known as herd immunity.

Is there evidence of coronavirus coming back in a second wave?

This is being watched very carefully. Without a vaccine, and with no widespread immunity to the new disease, one alarm is being sounded by the experience of Singapore, which has seen a sudden resurgence in infections despite being lauded for its early handling of the outbreak.

Although Singapore instituted a strong contact tracing system for its general population, the disease re-emerged in cramped dormitory accommodation used by thousands of foreign workers with inadequate hygiene facilities and shared canteens.

Singapore’s experience, although very specific, has demonstrated the ability of the disease to come back strongly in places where people are in close proximity and its ability to exploit any weakness in public health regimes set up to counter it.

In June 2020, Beijing suffered from a new cluster of coronavirus cases which caused authorities to re-implement restrictions that China had previously been able to lift. In the UK, the city of Leicester was unable to come out of lockdown because of the development of a new spike of coronavirus cases. Clusters also emerged in Melbourne, requiring a re-imposition of lockdown conditions.

What are experts worried about?

Conventional wisdom among scientists suggests second waves of resistant infections occur after the capacity for treatment and isolation becomes exhausted. In this case the concern is that the social and political consensus supporting lockdowns is being overtaken by public frustration and the urgent need to reopen economies.

However Linda Bauld, professor of public health at the University of Edinburgh, says “‘Second wave’ isn’t a term that we would use at the current time, as the virus hasn’t gone away, it’s in our population, it has spread to 188 countries so far, and what we are seeing now is essentially localised spikes or a localised return of a large number of cases.” 

The overall threat declines when susceptibility of the population to the disease falls below a certain threshold or when widespread vaccination becomes available.

In general terms the ratio of susceptible and immune individuals in a population at the end of one wave determines the potential magnitude of a subsequent wave. The worry is that with a vaccine still many months away, and the real rate of infection only being guessed at, populations worldwide remain highly vulnerable to both resurgence and subsequent waves.

Peter BeaumontEmma Graham-Harrison and Martin Belam

Marco Gobbetti, the luxury retailer’s chief executive, said he and the rest of the board of directors were taking a 20% reduction in their base salary and fees between April and June. The money will be donated to the Burberry Foundation Covid-19 Community Fund, to help support communities struggling with the fallout from the coronavirus pandemic by supplying personal protective equipment (PPE) and food banks.

“Since the outbreak of Covid-19, our priority has been the safety and wellbeing of our employees, our customers and our communities,” Gobbetti said. “While we continue to take mitigating actions to contain our costs and protect our financial position, we are also committed to safeguarding jobs and supporting the relief efforts during this global health emergency.”

Burberry has retooled its factory in Castleford, West Yorkshire, from making its famous trench coats into manufacturing PPE for medical and care workers. “We are also sourcing surgical masks through our supply chain and supplying them to the NHS and charities such as Marie Curie, which provides nursing care for families living with terminal illness in the UK,” the company said. “To date, we have donated more than 100,000 pieces of PPE.”

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The group, which warned last month its fourth-quarter sales would be 30% lower because of the pandemic, said it was continuing to look hard at its cost base, reducing spend on non-essential areas.

While many UK companies have utilised the government’s furlough scheme, which pays employees 80% of their salary, Burberry said it would not rely on government support in the UK, where more than a third of its workers are based. The workers who cant work are being paid in full by Burberry. The business employs around 10,000 people worldwide.

All Burberry’s UK stores are closed as part of the country’s lockdown to stem the spread of the virus.


Rupert Neate

The GuardianTramp

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