The chief executive of Monzo will not take a salary for a year as the digital challenger bank introduces pay cuts for executives and offers staff voluntary furlough amid the coronavirus crisis.
In an internal memo, Tom Blomfield told Monzo’s 1,500 employees he would forgo a salary for the next 12 months, with the lender’s senior management team and board volunteering to take a 25 per cent pay cut.
Some of the lender’s UK staff are also being offered voluntary furlough for two months via the scheme introduced by the government to limit layoffs during the pandemic.
Under the scheme, the government pays 80 per cent of furloughed employees’ wages, up to £2,500 per employee per month.
According to Tech Crunch, which first reported news of the measures, Monzo will accept up to 175 furlough applications from its customer support division and up to 120 from other areas of the bank.
Monzo has been hit by a decline in customer spending at home and abroad as coronavirus lockdown measures bite, resulting in less revenue from interchange fees, with new account signups and customer support requests also slowing, Tech Crunch reported.
Earlier this month, City A.M. reported on the measures being taken by the UK’s top three digital banks — Monzo, Starling and Revolut — to prepare for a lockdown.
Blomfield told City A.M. that the bank ran a full-scale shutdown rehearsal earlier this year to check the bank could continue to operate smoothly with all staff at home.
“Coronavirus is going to have a very severe impact across the world… These kind of situations are the ones that we as a bank have planned very significantly for,” he said.