Notice to Employees of Bonus Cancellation

It is a formal official notice which is written by an employer to his employees. Through this notice, employees are informed that their bonus for a specified period will be canceled. It’s never easy to break the news of this kind to employees. Somehow, it has to be done when business is facing a hard time. At that time, instead of downsizing and rendering the employees jobless, bonus cancellation becomes indispensable. However, before sending this kind of notice, employees must be taken in confidence well before time so that they could make early arrangements in accordance with the situation.

Whatever the case may be, it’s always disheartening for an employer to send a bonus cancellation notice to his employees. Every company values its employees and never wants to deprive any of its employees of financial benefits. But sometimes, there is no other choice left for the employer but to send notices like this kind.

Reasons behind bonus cancellation notice

  • If the business is facing hard times.
  • This notice can also be given to an employee for showing poor performance.

Sample Letter

Dear Employees,

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 the outbreak of Coronavirus, our exports to China, Canada, and Russia were affected badly and the company had to bear great losses owing to the situation. The situation led to a huge financial crisis. We had left with no choice but to cancel the annual bonus of each employee.

We came up with the decision last month when our HR recommended us to eliminate a large number of employees. The second option was cost reduction keeping everybody’s job secure. We opted second keeping in view the prevailing job crisis. Unfortunately, we had to eliminate your annual bonus this year.

It has been the first time since 1990 that we are not paying a bonus to our employees. I hope the situation goes better next year and then we will reinstate our bonus policy.


CEO Stars Chemicals Pvt. Ltd.

File: Word (.docx) 2007+ and iPad Size 18 Kb | Download

Sample Letter -2

Letter to an Employee Informing him about No Performance Bonus

20th April 20XX

Lucas Romer

The Manager,
Estacio Group of Companies
Box no. 50897, Dubai, Emirates

Dear George,

This writing aims to respond to you upon your request to bestow with a five percent increase in your salary next month as a bonus. I went through your email watchfully and read all of your contents and reasons rationalizing a salary bonus for you. I also revisited your profile taking into account all of the projects you have worked upon.

Here, I want to put on some details regarding your working efficiency and overall performance. Dear George, you joined the company one year ago. From the time you joined for your first day to the present day, your work has been scrutinized.

  1. You have been non-serious with the punctuality needed at work and also with the rules and regulations. You were provided with a detailed warning letter asking you to be punctual and get serious with the work.
  2. The last two months were crucial days for the company in which you remained absent many times without even informing the admin.
  3. You were given three major projects to work on for which you were reported highly unprofessional and non-serious.

George, everyone on this planet is going through some troubles and hard times but you are challenged to keep pace and balance and never to mix your professional and personal life affecting your working capabilities and efficiency. At the time of the interview, you were informed about your lack of experience and the level of productivity and proactivity the company demands but you promised to keep the company’s trust in your capabilities.

You have performed well but it is much lower to the company’s expectation. Your case has also been discussed with the CEO but he is also of the view that you need to work harder, faster, and show some more adroitness to demand a salary bonus. Your performance, unfortunately, has been unsatisfactory in terms of discipline and efficiency. The company’s policy of granting bonuses clearly states that bonuses are implied to the employees who have been up to the company’s expectations and can be regarded as lead workers i.e. after winning at least five consecutive projects.

To win a title likewise, I suggest you wait for three months and get better with your working proactivity. You are welcomed for negotiations.




File: Word (.docx) 2007+ and iPad Size 22 Kb | Download