OSAKA – Struggling electronics-maker Sharp Corp. plans to cut employees’ base salaries by 1 to 2 percent from August through March next year in a cost-cutting effort to return to profitability, sources close to the matter said Wednesday.
The plan, which its labor union has been informed of, comes after Sharp fell into the red again in the business year that ended on March 31, posting a net group loss of ¥222.3 billion ($1.8 billion) following just one year in the black amid intensifying competition from its Asian rivals.
The Osaka-based company is also looking to cut employee’s winter bonuses to a level equivalent to one-month salary, a half of the previous year’s, and reduce their family and business trip allowances, the sources said.
Executive officers will have their base salaries cut by 5 percent, they added.
The pay cuts are expected to help Sharp lower labor costs by around ¥3 billion in the current business year through March 2016.
As for its plan to cut around 3,500 jobs in Japan through an early requirement plan, Sharp will target employees aged between 45 and 59, the sources said.
After registering massive losses for two consecutive years through March 2013, Sharp reduced salaries and bonuses of its employees and executives in the 2012 and 2013 business years, but suspended the measures in the year to March 2015 amid improving performance.