Tokyo Electric Power Co. said Monday it has scrapped its plan to hire new employees who would have started work next spring amid the ongoing nuclear crisis at its troubled Fukushima No. 1 power plant.
Faced with the prospect of massive compensation costs linked to the accident, Tepco also said it will cut the annual remuneration for board members and wages for employees, and slash some ¥54 billion a year.
The radiation-leaking nuclear plant, which was crippled by the March 11 earthquake and tsunami, sparked concerns about food safety and forced nearby residents to evacuate their homes.
It is the first time since 1951 for the utility to forgo new hiring. In February, the company said it would hire 1,100 graduates and received applications from around 6,500.
Under the plan, compensation for the chairman, president, vice president and managing directors will be cut by 50 percent. It will also cut by 25 percent the annual salary for employees in management posts, and by 20 percent the annual pay of rank-and-file employees.
"We will consider and implement drastic steps to cut costs without exceptions by streamlining our business management and to secure enough funding," President Masataka Shimizu said in a press release.
Tepco's 19 board members, excluding outside directors, received a combined ¥698 million in annual remuneration in fiscal 2009, according to a financial statement filed with the government for the fiscal year through March 2010.
That puts the average annual remuneration per board member at about ¥37 million.
Tepco's labor union said it has accepted the pay cut because the union "has taken seriously the fact that many evacuees are forced to live in shelters and (the nuclear accident) has had a serious social impact."
