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Sony Freezing Salaries

sjohnson
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Posted March 19, 2009 - By Stephen Johnson

Sony Freezing SalariesIt's a bad time to be Sony. The company is expected to post an operating loss of $2.65 billion for the year. A huge percentage of the gaming world is calling for the firm to cut the price of its flagship gaming system; the company's stock is in the crapper, having gone from a high of over 150 in 2000 to today's price, hovering around 20 a share; layoffs and factory closings have hit the firm hard (although not so much the gaming department). And today, for those "lucky" Sony workers who have managed to hold on to their gigs at the company, comes more bad news: According to the financial daily Nikkei, Sony will freeze workers' salaries for the year starting in April to improve profitability.

The paper also said workers' bonuses will be lowered to four months' pay from six months; yearly compensation for managers will be dropped 10 to 20 percent through wage reductions and bonus cuts. So everyone is going to be tightening his or her already taut belt over at Sony.

Video-game-focused readers, before you start blaming the PlayStation 3, please understand: The main culprit here is the global economic downtown and the strength of the yen. Sony's gaming division reported a 97 percent drop in operating profit last year, mainly because console and software sales are declining, so it's not exactly helping out or anything, but you can't really expect sales of anything to jump in the middle of The Great Recession, can you? Unless, of course, you're selling "Going out of Business!" signs.

But let's be constructive here: As far as the gaming department goes, what can Sony do to turn things around?

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