Sharp to cut pay and bonuses again Sharp, the Japanese electronics group, has announced that it will increase its cuts to managers" pay and bonuses and ask factory workers to accept lower wages as part of an effort to save Y140bn. The restructuring measures, announced on Tuesday, underscore the crisis at the century-old company. Sharp is seeking a rescue investment from a Taiwanese rival, Hon Hai Precision Industry, in an unprecedented step for a large Japanese technology group. Sharp said it would double the size of the managerial pay cut that was imposed in April, to 10 per cent, and reduce winter bonuses by half. In Japan, twice-yearly bonuses are a major component of white-collar workers" pay, often accounting for a quarter or more of total annual income. Sharp had already cut summer bonuses by 30 per cent. By imposing austerity measures on relatively well-paid managers, Sharp hopes to convince its factory workers and lower-level administrative staff to accept cuts of their own. The company has submitted a proposal to its labour union to extend a wage cut agreed in May, from 2 per cent to 7 per cent, as well as shrinking bonuses for salaried workers by half and reducing overtime pay and benefits. If accepted, the measures - combined with the pay cuts for managers - would reduce Sharp's fixed costs by Y140bn ($1.8bn) in the current fiscal year, which ends in March, the company said. That would come on top of savings from the already-announced elimination of 5,000 jobs - about 10 per cent of Sharp's global workforce. Sharp's problems stem from its narrow focus on televisions, a product segment in which Japanese groups have lost competitiveness to foreign rivals. Falling prices for flatscreen sets have made it difficult for even the industry's leaders - Samsung and LG of South Korea - to earn consistent profits. For higher-cost Japanese groups such as Sharp, Sony and Panasonic, the result has been hundreds of billions of yen in losses. Sharp suffered a net loss of Y376bn last year, and expects to lose another Y250bn this year. Its share price has fallen 70 per cent this year and, last month, Standard & Poor's cut its credit rating to junk. Uncertainty about the investment from Hon Hai, also known as Foxconn, has compounded Sharp's problems. Hon Hai, which assembles electronic devices for Apple and other global brands, agreed provisionally in March to buy 10 per cent of Sharp for Y67bn and take partial control of a Sharp television display factory near Osaka. But Sharp's fading stock price has prompted Hon Hai's billionaire founder, Terry Gou, to seek better terms, and a final deal has still not been agreed.