Abe calls for higher wages
Reuters, Tokyo :
Sony Corp is likely to cut average pay next year in a rare move for a big Japanese company, and one that goes against Prime Minister Shinzo Abe’s push for higher wages to get the economy moving.
For a second year, Abe is pressuring major companies to raise base pay in the fiscal year from April, and boost investment, to kick-start a positive cycle of higher wages, profits and prices to end 15 years of deflation.
Japan’s main union of electronics workers is likely to demand a hike of over 2 percent in base pay, and companies are widely expected to comply. Most Sony workers, however, don’t belong to the Japanese Electrical Electronic & Information Union, and the company’s average pay of 8.85 million yen ($74,000) is among the industry’s highest.
Sony is going through a painful restructuring after cutting its earnings forecasts six times in two years, and the once-storied electronics maker said earlier this year it will overhaul its salary structure for the first time in a decade, without elaborating on expected changes in pay.
“We are at this time studying various issues as Sony overall is in a difficult situation,” spokeswoman Yo Kikuchi told Reuters. “The current human resources system was put in place around 10 years ago, so it was also time for a review.”
Pay cuts are unusual in Japan, especially at big companies with their tradition of jobs-for-life and seniority-based compensation. Employers typically adjust to hard times by trimming bonus and overtime pay and hiring fewer new graduates.
Sony Corp is likely to cut average pay next year in a rare move for a big Japanese company, and one that goes against Prime Minister Shinzo Abe’s push for higher wages to get the economy moving.
For a second year, Abe is pressuring major companies to raise base pay in the fiscal year from April, and boost investment, to kick-start a positive cycle of higher wages, profits and prices to end 15 years of deflation.
Japan’s main union of electronics workers is likely to demand a hike of over 2 percent in base pay, and companies are widely expected to comply. Most Sony workers, however, don’t belong to the Japanese Electrical Electronic & Information Union, and the company’s average pay of 8.85 million yen ($74,000) is among the industry’s highest.
Sony is going through a painful restructuring after cutting its earnings forecasts six times in two years, and the once-storied electronics maker said earlier this year it will overhaul its salary structure for the first time in a decade, without elaborating on expected changes in pay.
“We are at this time studying various issues as Sony overall is in a difficult situation,” spokeswoman Yo Kikuchi told Reuters. “The current human resources system was put in place around 10 years ago, so it was also time for a review.”
Pay cuts are unusual in Japan, especially at big companies with their tradition of jobs-for-life and seniority-based compensation. Employers typically adjust to hard times by trimming bonus and overtime pay and hiring fewer new graduates.
