Sony Corp has frozen its employees' salaries for a year starting in April, in an attempt to improve the company's flagging profitability.
Workers' bonuses will also be lowered to the equivalent of four months pay rather than six months, according to Nikkei and reported by Reuters. Meanwhile, annual compensation for managers will be dropped by 10 to 20 per cent through wage cuts and by 35 to 40 per cent through bonus reductions.
"Executives will also be slugged with huge cuts to bonuses and salaries," Nikkei said.
Yesterday, Sony slashed its dividend payment to JPY 12.5 (13 cents) per share, compared to the previous figure of JPY 20 (20 cents).
Earlier this year, Sony announced plans to cut USD 2.8 billion costs by 2010, following estimates that it is to lose JPY 150 billion (USD 1.68 billion) for the financial year ending March 2009.
Sony Corp's stock price finished trading at USD 20.87 per share, up by 2.05 per cent or USD 0.42, from the previous close.
UPDATE: Sony Computer Entertainment Europe has informed GamesIndustry.biz that the division currently remains unaffected by the company's pay freeze.
"SCE has adopted a payment system closely linked to the business performance of each individual employee as well as the company as a whole, and there is no plan at this time to change this payment system," explained a spokesperson.
"However, in order to stay competitive in the accelerating global network environment, we will always carefully review and make structural changes, if necessary, in order to further expand and strengthen the PlayStation business around the world."