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Sharp increases pay cuts to pare down costs

Posted: 18 Sep 2012 ?? ?Print Version ?Bookmark and Share

Keywords:LCD TV? workforce reduction? restructuring plan?

Sharp has said in a statement that it plans to slash off ten percent of managers' salaries and halve bonuses while also seeking approval from the labor union to shrink wages of rank and file staff by seven percent. The raised pay cuts underscore efforts by Sharp to save about $180 million in personnel costs for the 2012 fiscal year.

The cuts are due to come into force October 1 and last for one year. Across all its operations Sharp has about 57,000 employees although in August the company announced a plan to cut 5,000 jobs by the end of the financial year on March 31, 2013.

The latest tariff of wage cuts are increased from a previously agreed 2 percent drop for workers and 5 percent cut for management. In addition, Sharp also announced the cutting back of premium overtime payments to the legal minimum and the termination of welfare programs.

Sharp has been hit hard by a slump in the sale of liquid crystal displays generally and LCD televisions in particular and is now expected to forecast a loss of about 300 billion yen (about $3.8 billion) for the year to March 31, 2013. The company made a net loss of 138.4 billion yen (about $1.8 billion) in the first fiscal quarter to June 30, 2012.

The company had been trying since March to forge a partnership with Hon Hai Precision Industry Co. Ltd. (also known as Foxconn), the world's largest contract manufacturer and a supplier of manufacturing services to consumer electronics giant Apple. However, a bail-out plan that included investment from Hon Hai in return for a transfer of LCD technology has become drawn out as Sharp's share price has collapsed. With the deal in limbo Sharp was reported earlier this month to have mortgaged nearly all of its domestic factories and offices, including one making liquid crystal displays for Apple products, to secure loans.

- Peter Clarke
??EE Times

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