Fujitsu to Cut Managers’ Salaries and Bonuses

Fujitsu Ltd., which expects to record a loss of about $2.6 billion this year, said it will reduce salaries and bonuses of managers to cut costs.

Fujitsu will cut monthly salaries of 500 managers, who aren’t board members, by 3% from this month to next March, company spokesman Robert Pomeroy said. Fujitsu also will pare the winter bonuses of 6,000 non-board managers by between 10% and 20%, he said.

The news was earlier reported in the Yomiuri newspaper. Employees will receive the bonuses next month.

Fujitsu, the third-biggest maker of mobile-phone memory chips, is taking a one-time charge of $2.89 billion this year to account for 11% of work force cuts and other reorganization as plunging chip prices are expected to push the company to its biggest-ever loss.

The “purpose [of the pay cut] is raising sense of having to deal with the situation strongly,” Pomeroy said.

The company had no estimates on how much savings will be achieved through the move, he said.

President Naoyuki Akikusa last month said annual compensation for himself and Chairman Tadashi Sekizawa will halve in the year ending March 2002, and 32 board members will take up to a 50% cut in annual pay.

Toshiba Corp., the second-biggest chip maker after Intel Corp., and Hitachi Ltd., Japan’s biggest electronics maker, will not cut monthly salaries of non-board members, Toshiba spokesman Hiroshi Nakamura and Hitachi spokeswoman Emi Takase said. Both companies will pay less bonus than last year, they said.

Separately, Fujitsu continues to monitor if it should suspend operations of chip plants for a few days or not, Pomeroy said.

The Tokyo-based company, which is slashing 11% of its group work force to weather what analysts say is the worst-ever slump for the semiconductor industry, had its debt rating cut one notch to A3 by Moody’s Investors Service last week.