Asian companies cut back on Lunar New Year celebrations

Wed Jan 14, 2009 8:41pm EST
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By Ralph Jennings

TAIPEI (Reuters) - With exports plunging and orders drying up, there is little reason for cheer this Lunar New Year for Asian companies that are calling off their usual lavish parties and cancelling generous cash and gift bonuses.

"It will be hard to handle psychologically," said Hsieh Chua-chih, secretary-general of the Taiwan Confederation of Trade Unions. "Employees will find it hard to accept as it's an important period and they need to give money to their family."

The Lunar New Year festival is the main shopping and partying event of the calendar in East Asia. In the past, Taiwan companies would throw million-dollar parties and dole out TV sets and stereos to employees along with envelopes stuffed with cash.

But this year, amidst a global economic crisis that has pushed the unemployment rate in Taiwan to a five-year high and sent exports plunging by a record 42 percent, companies are cutting costs even as they try to hold onto their workforce in the hope of an economic turnaround.

With export-dependent Asian economies such as China, South Korea and Japan showing similar signs of weakness, it's no surprise that austere corporate Lunar New Year parties are all the rage as Asia prepares to welcome the Year of the Ox.

Hon Hai, a Taiwan high-tech firm that makes parts for iPods, Nintendo consoles and Nokia phones, will hold a modest party this year rather than the T$200 million ($6 million) bash it held last year, giving away cash and gift prizes, including a car, worth millions. "The party will be a bit lower-key," said a company publicist, declining to provide details. "As long as everyone has a good time, then it's all right."

Trade-reliant Asian economies are reeling from a global slump, with Singapore, Hong Kong and Japan already in recession and major companies in the region cutting production, freezing job recruitment and laying off workers to save money.

Taiwan's economic slowdown has snowballed with alarming speed. Exports, which were still growing by double-digits as recently as August, have tumbled in the past few months.   Continued...