Japanese firms cut down on year-end bonuses
Japanese companies are cutting down year-end bonuses for employees by the most since the global financial crisis, according to findings by major business lobby Keidanren.
Individual bonuses for employees fell by 9% to 865,621 yen (US$8,363), based on a weighted average of special payments by 164 large corporations tallied. This also marks the steepest drop since 2009, when winter bonuses declined by 15%, reported Bloomberg.
Businesses that were more affected include service companies, which suffered a 13% drop in bonuses, while manufacturers suffered a 7.5% decline.
Meanwhile, employees at two Japan Railway companies ended up with some US$3,000 less in additional payments than in 2019. Bonuses of steel workers took a 25% hit.
The data also showed that Japan’s large companies were slow to cut overall compensation amid the COVID-19 pandemic, honouring payment agreements in the summer.
Earlier in November, the Japanese government also made the decision to cut its bonuses for public servants in 2020, the first time it has done so in a decade.
The move came after bonuses in the private sector were found to be lower than public sector staff as a result of the pandemic.
Once the new legislation is approved, public servants would receive a lower bonus equivalent to 4.45 months of their salary, from the previous bonus worth 4.5 months of pay.