In a dramatic example of workers acknowledging harsh economic realities, steelworkers at a British plant have agreed to temporarily cut their salary by half in order to help keep their company afloat.

According BBC, more than 150 employers of Caparo Merchant Bar, a steel firm based in Scunthorpe, North Lincolnshire, also agreed to take an extended holiday over Christmas and New Years to help reduce costs. Most of the workers will return January 3 – toiling at half their prior pay.

In a statement, the company said: “This action is to allow [Caparo] to realign its stocks to current market conditions and take the opportunity to carry out essential engineering works. This stoppage has resulted in a limited number of short-time working days for some employees. This action has the full backing of the Trade Union on site who continue to show great flexibility in order for the company to efficiently meet current market conditions.”

Caparo added: “Extended stoppages are not unusual at this time of year in this industry particularly if trading conditions are weak.”

Andy McGarrigle, a union official at Caparo in Scunthorpe, told BBC that the drastic measure was a consequence of the deep recession that has ensnared Britain and much of Europe – particularly in the battered manufacturing sector.

We do see this as a short-term problem, we're hopeful that we can see the company through these difficulties and by working with the company we can hopefully come out in the new year and see the company begin to grow,” he said.

We understand the economic realities and... the problems across the economy, across steel-making in particular. It is a difficult time. It's not an easy decision to take but we've got a strong business down there and we've got some really high skilled workers.”

McGarrigle added: It's in manufacturing, it's in the private sector and these are the jobs that we need to take our economy out of the current difficulties.

Similarly, local politicians also lamented the wage losses, but understood the need for them.

Nic Dakin, the Labour MP for Scunthorpe, told BBC: These are very difficult times and... people understand that it's far better to have a job at the moment and to work together with your employer to get through these difficulties than to find yourself without a job. They're working together to get through difficulties, which is a very sensible thing to do and I'm sure they'll get through.

The steel industry in Great Britain has been in decline for years. In 2010, crude steel production fell by 4 percent, the third straight year of decline, according to trade association UK Steel.