Sharp to cut salaries in a fresh bid to squeeze costs

Reuters News
Posted: Sep 11, 2012 3:31 AM
Sharp to cut salaries in a fresh bid to squeeze costs

TOKYO (Reuters) - Japan's Sharp Corp said it will trim salaries of its managers by a tenth for a year and seek an across-the-board wage cut for other workers as the cash-strapped TV maker looks for fresh ways to save money.

In addition to a 10 percent pay cut, Sharp said in a statement on Tuesday it will also halve bonuses paid to managers, while seeking union agreement to lower the salaries of rank and file workers by 7 percent for a year, deeper than a 2 percent cut agreed in May.

The latest cost-paring should save the company 14 billion yen ($179 million), adding to savings it expects from plans to trim 5,000 jobs, or a tenth of its workforce, including 2,000 redundancies in Japan. Those layoffs are the first at the firm in more than 60 years.

By resorting to pay cuts Sharp may avoid having to add to those job losses and also be able to realize swifter cash savings. Redundancies in Japan are expensive, with workers typically receiving at least a year's salary in severance pay.

For now, Sharp, which is also negotiating a cash injection from Taiwan's Hon Hai Precision Industry Co Ltd, is relying on its main banks -- Mizuho Financial Group and Mitsubishi UFJ Financial Group -- for funding.

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Sharp said last week it mortgaged nearly all of its domestic offices and factories, including one which makes screens for Apple Inc's latest iPhone, to secure the fresh loans of up to 150 billion yen it needs to stay in business.

($1 = 78.2900 Japanese yen)

(Reporting by Tim Kelly and Miki Kayaoka; Editing by Michael Watson and Muralikumar Anantharaman)