Loss-making Sony freezes wages; others may follow

Loss-making Sony freezes wages; others may follow
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First Published: Thu, Mar 19 2009. 10 37 AM IST
Updated: Thu, Mar 19 2009. 10 37 AM IST
Tokyo: Japanese electronics firm Sony Corp said on Thursday it would freeze workers’ salaries this year as the company tried to recover from a record loss, and its rivals may follow in the face of a global sales slump.
Unemployment is rising in Japan as a slide in exports forces firms to curb production, with the tech sector among the worst hit.
Unlike many Japanese companies, Sony does not automatically raise salaries each year based on seniority. Instead pay rises are set annually for each worker based on their role and performance.
”This time we decided to keep the workers’ salaries unchanged,” Sony spokeswoman Mami Imada said, ahead of the pay round for the financial year starting next month.
Three other Japanese tech companies -- Toshiba Corp, NEC Corp and Hitachi Ltd -- said on Wednesday they were considering similar moves.
The global financial crisis and a strong yen that hit 13-year highs in January is pushing Sony to a projected operating loss of $2.9 billion for the current financial year to 31 March.
Sony’s shares dropped 1.4% to 1,963 yen on Thursday, underperforming a 0.6% fall in the Nikkei 225 index.
Sony said in January that pay for managers would drop by 10 to 20% through wage cuts and bonus reductions of 35 to 40%.
Imada said Sony workers’ bonuses would be cut to four months’ pay from six months.
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First Published: Thu, Mar 19 2009. 10 37 AM IST
More Topics: Sony | Japan | Recession | Salary | Layoffs |