Panasonic to cut 15,000 jobs, suffers $4.2 bn loss

Panasonic to cut 15,000 jobs, suffers $4.2 bn loss
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First Published: Wed, Feb 04 2009. 01 36 PM IST
Updated: Wed, Feb 04 2009. 01 36 PM IST
Tokyo: Panasonic Corp. said on Wednesday it will slash 15,000 jobs and shut down 27 plants worldwide to cope with plunging demand for its TVs, semiconductors and other electronics products.
The world’s largest maker of plasma display TVs also announced a net loss for the October-December quarter and lowered its forecast for the fiscal year through March to a net loss of ¥380 billion ($4.2 billion), its first annual loss in six years.
Panasonic joins a slew of other major Japanese companies, including Sony Corp. and Toshiba Corp., in announcing job cuts and forecasting a full-year loss and the global slowdown batters the world’s second-largest economy.
The Osaka-based manufacturer plans to cut the jobs half of which will come in Japan by the end of March 2010. They amount to about 5% of its 300,000-strong global work force.
Panasonic also will shutter 14 overseas plants and 13 plants in Japan to adjust production and cut costs, company spokesman Akira Kadota said.
Panasonic blamed the dismal earnings results on the global slowdown set off by the U.S. financial crisis, the rapid surge of the yen and sudden price drops. Sales slid in a wide range of products, including flat-panel TVs, DVD recorders, microwaves, lamps and semiconductors, it said.
“The company’s business conditions have worsened particularly since last October, due mainly to the rapid appreciation of the yen, sluggish consumer spending worldwide and ever intensified price competition,” it said in a statement.
Panasonic reported a ¥63.1 billion ($709 million) loss for the fiscal third quarter, down from a 115.2 billion yen profit the same quarter the previous year.
The last time Panasonic reported an annual loss was for the fiscal year ended March 2002, when a global electronics slump and massive restructuring costs contributed to ¥431 billion in red ink.
Since then, the company has been shedding money-losing businesses and focusing on key products such as plasma display TVs to turn itself around.
The company, formerly named Matsushita Electric Industrial Co., for its founder, also lowered its sales forecast for the fiscal year ending March 31, to 7.75 trillion yen from an earlier 8.5 trillion yen.
Rival Japanese manufacturer Sony is forecasting a ¥150 billion net loss for the fiscal year through March. The last and only time Sony reported a loss _ the fiscal year ending March 1995 the red ink came from one-time losses in its movie division, marred by box office flops and lax cost controls.
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First Published: Wed, Feb 04 2009. 01 36 PM IST