Sony Corp. will freeze wages for regular workers for one year starting next month, sources said Thursday.
For managers with nonboard posts, the major electronics maker plans to reduce annual bonuses for fiscal 2009 by 35 percent to 40 percent compared with the current business year to March 31, the sources said. On an annual income basis, the cuts mean a pay reduction of 10 percent to 20 percent.
Sony’s representative corporate executive officers on the board, including Chairman Howard Stringer, will face pay cuts of more than 50 percent on an annual income basis, while other board members will see cuts of more than 30 percent, the sources said.
Stringer will double as president starting April 1.
Management judged it was crucial to cut recurring fixed expenses like personnel costs to restore profitability, the sources said. Sony is expected to incur a record group operating loss of ¥260 billion in the 12-month period ending later this month.
Other major home electronics makers, including Toshiba Corp., NEC Corp. and Hitachi Ltd., are moving to place a six-month freeze on wages that usually go up every year according to the length of service and seniority.
Sony is slapping a longer freeze than those of its rivals to speed up the process of reviving profitability, the sources said.
Sony’s wage hike system differs from those at most major companies because it does not grant wage hikes each year according to length of service and seniority. It instead uses performance.
Monthly wages for rank-and-file workers will remain at an average of ¥381,584. In addition, they will receive an average of ¥1.53 million in annual bonuses.
Last year’s bonuses came to an average of ¥2.30 million.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.