Toshiba to cut managers' salaries, bonuses
Will it make much difference?
Toshiba has cut managers' salaries, asking these employees to bear the burden as it faces a "crisis" and "the more sever situatuation since the founding of [the] company".
So said company president Tadashi Okamura in an email to senior staffers. The email went on to detail cuts of between 1.5 per cent and three per cent. The company will also cut its traditional winter bonus payments from 2.6 months' pay to 2.4 months'.
The move follows the company's admission recently that it stands to lose $1.6 billion this year, a result of the collapse in memory prices as demand has fallen and output increased.
Apart from the salary cut, Toshiba has cut back on chip production by 25 per cent and opened negotiations with Infineon to discuss how the two companies' DRAM operations can be merged.
Toshiba won't say how those talks are progressing. Neither will it say how much money it hopes to save through the salary cuts, how many workers will be affected, nor when the austerity measure will come to an end.
Managers can take some small consolation from the fact that 37 Toshiba board members will have their salaries cut by up to 20 per cent too. President Okamura will be one of those affected by the cut.
Even so, it's hard to see the cuts making much of a difference to Toshiba's bottom line. They are probably more about persuading the outside world that the company is actively tackling its problems than... well... tackling its problems. ®