Bosses at Bakkavor have agreed to take pay cuts as the fresh prepared foods (FPF) supplier is looking to reduce capacity, which may mean furloughing staff, in light of the Covid-19 crisis.The business had withdrawn its financial guidance for 2020, which was issued on 27 February, instead committing to actions to maintain liquidity, given that market conditions “remain highly uncertain for the foreseeable future”.Despite an “encouraging” start to the year, the Covid-19 outbreak has presented significant operating challenges for Bakkavor, initially in China but more recently in the US and UK. In the latter, which represents around 90% of group adjusted EBITDA, there has been a reduction in orders across all categories, most notably salads and food-to-go products.The company, which also supplies fresh food including desserts, pizza and bread to retailers such as Tesco, Marks & Spencer, Sainsbury’s and Waitrose, said it was reviewing capacity across its facilities to better match demand and, wherever possible, would be supporting impacted staff by making use of the government’s Coronavirus Job Retention Scheme.In addition, several members of senior management have agreed to a temporary pay cut.“Members of the board and management board have also agreed voluntary reductions in remuneration for the coming three months,” the company stated.“The chairman and non-executive directors have agreed to a 50% reduction in base salaries and fees, while the group’s founders (CEO Agust Gudmundsson and non-executive director Lydur Gudmundsson) have volunteered not to take a salary in the period. The wider management board have also agreed to a voluntary 20% reduction in base salaries.”Bakkavor said it was responding to the impact of Covid-19 from a position of strength, and currently had facilities in place of £562m.“While uncertainty related to Covid-19 remains, we will continue to prioritise our employees in their roles as key workers and support our customers in every way we can to ensure the continued supply of fresh prepared food. Looking further ahead, we remain confident that the strength of our business and strategy leaves us well positioned to achieve long-term sustainable growth within the attractive FPF sector,” it added.Extra measuresBakkavor has also implemented several additional controls for managing people and food safety within its UK operations. These include restricted visitor access, a more rigorous return-to-work procedure, additional handwashing protocols and more frequent cleaning regimes at touchpoints.In addition, all staff are self-certified as fit to work, and the business is adhering to PHE guidelines for social distancing in offices, rest, changing and ancillary areas, as well as following the specific PHE guidance for distancing in food manufacturing businesses.