Bonus cancellation announcement

How do you tell an employee they are not getting a bonus?

When you have bad news to announce, for example, that this year the bonuses have been canceled, it's always best to mention the bad news directly in the beginning. Only after the bad news was served, you will need more time to discuss this hard measure. It's understandable in many cases, that because of the Coronavirus outbreak, your exports were affected badly and the company had to bear great losses owing to the situation. Since this situation might have led to a huge financial crisis, with a big impact on our operations, the employee needs to understand a bonus is not available in the coming year. On top of this, explain that the alternative was cost reduction, and not keeping everybody’s job secure. Your staff will now clearly understand that you had to eliminate their annual bonus this year. 

How do you write a letter to cancel a bonus?

Firstly it's important to be clear why the bonus is not given. Also emphasize that this situation is temporary and that, while it is unfortunate, you will hope for better days when the bonus will be reinstated. Many people are happy they still can keep their job, during these harsh times and however the business is low, they are still able to resume business. It is important for you to write such a letter in a courteous manner. Employees are hereby notified that the bonus for the quarter or annual bonus has been cancelled. It's also possible that you have to inform that work has to be done in a different way, so it can be done safely, while the coronavirus is spreading.

Formal notice bonus cancellation

Dear Employees, Dear Mr./Ms. Last Name,

This writing aims to announce the unfortunate fact that we cannot award the annual bonuses due to the current pandemic that is already impacting our business over the last [##] months. You all know it has been our tradition to award our employees with the annual bonuses in recognition of their wonderful services.

I am regretful to announce that this year your bonuses have been canceled. We had to take this hard step because you all know due to ..., our exports to [Markets] were affected badly and the company had to bear great losses owing to the situation. The situation led to a huge financial crisis with a big impact on our operations. We had left with no choice but to cancel the annual bonus of [you/each employee]. We came up with the decision last month when our HR recommended us to eliminate a large number of our staff. The second option was cost reduction keeping everybody’s job secure. ....

Yours sincerely, 

Download this letter to an Employee Informing him about the reduced or cancellation of the bonus now.