Japan's Sharp Corp. (IW 1000/120) said Thursday it will cut 5,000 jobs by March as it reported a quarterly loss and said it would remain in the red for the rest of the year amid losses at its struggling TV business.
The major consumer electronics maker said its net loss for the April-June quarter was 138.4 billion yen ($1.76 billion), compared with a loss of 49.3 billion in the same period a year ago.
Its operating loss was 94.1 billion yen, plunging from an operating profit of 3.5 billion yen a year ago. Sales fell 28.4% to 458.6 billion yen.
The company, which has seen its mainstay television, liquid crystal display and solar panel products struggle, said the job reductions were part of a bid to cut fixed costs by 100 billion yen to help its dented balance sheet.
The company currently employs 57,000 people globally.
"The domestic and Chinese demand for liquid crystal display televisions fell at a faster pace than expected," the company said in a statement.
"Tough business climate continued as the slower demand forced production adjustment at factories for large LCDs, while prices fell for finished products and electronic devices," it said.
Sharp also had to book a 15.86 billion yen special loss related to the settlement of a lawsuit brought by Dell, which claimed it had been overcharged by Sharp and several other firms over several years.
The company had originally considered cutting about 3,000 domestic jobs, but decided to expand the scope to include worldwide operations to accelerate a management restructuring, Kyodo News said.
Meanwhile, Sharp executives will take pay cuts of 20-50%, compared with originally planned 10-30%, Kyodo and broadcaster NHK said.
Sharp also downgraded its annual earnings forecast, saying it now expected an annual net loss of 250 billion yen for the fiscal year through March 2013, a huge increase from an earlier projection for a loss of 30 billion yen.
It also raised its annual operating loss estimate to 100 billion yen, from an earlier 20 billion yen.
Annual sales are expected to be 2.5 trillion yen, down from an earlier projection for 2.7 trillion, it said.
Looking ahead, the company also listed concerns, including Japan's deflation and electricity supply, as the nation now uses only two of some 50 nuclear power reactors that used to provide some 30 percent of electricity in Japan.
The government and utilities have not switched on most of the nuclear reactors due to public opposition after the Fukushima crisis.
"The uncertain business condition is expected to continue as downside risks for the economy are expected to grow on rekindled eurozone financial worries, a high yen, deflation and uncertain energy supplies," Sharp said.
The firm suffered a record $4.7 billion net loss in the year to March 2012 as global sales of its LCD televisions slumped.
Sharp has expressed hope that increased efficiency and synergy with new Taiwanese partner Hon Hai Precision should help its turnaround efforts.
-- Dow Jones Newswires contributed to this report --
Copyright Agence France-Presse, 2012