updated 11:00 am EDT, Thu March 19, 2009
Sony Japan freezes wages
For the first time in company history, Sony will freeze the wages of its workers in Japan in an effort to cut operating losses and keep a lid on costs, according to a Financial Times report on Thursday. At the same time, the company will cut average bonuses, with factory workers getting a 53 percent smaller bonuses, down from the equivalent of about $23,400, that in itself is expected to save Sony about $105 million in 2009 compared to last year. The move would let Sony take active steps to keep costs in check without cutting more permanent jobs in its home country.
Panasonic has already frozen pay scales but staff will still get raises with seniority. Hitachi and Toshiba may follow in Sony's and Panasonic's footsteps, which would be a new trend for Japanese companies, which have traditionally rewarded workers with higher pay based on their seniority.
While Sony, along with other Japanese companies, have cut staff and closed factories in other countries, they are trying to retain all of their domestic workers as they were promised lifetime employment and rising wages. Other measures being considered are work-sharing programs where workers would work less but at the same rate of pay. Hitachi proposes each employee take one day of unpaid leave per month, for example.
Also, to keep workers with seniority feeling more secure, large companies are planning on hiring 12.6 percent fewer college students in March of next year than in years past.
Sony is expecting to post a 260 billion yen loss ($2.7 billion), its first in 14 years, this fiscal year ending in March. The company's chairman and chief executive, Sir Howard Stringer, has said he will cut costs by more than $3 billion in the next year to minimize the risk for future years.