Electronics giant Panasonic said on April 27 that it will cut its global workforce to 350,000 in two years, a reduction of about 17,000 positions, in a bid to streamline its operations.
It also planned to spend $1.9 billion over the next two years on restructuring in a drive to increase its global competitiveness.
The announcement came after Panasonic Electric Works and Sanyo Electric this month became wholly owned units of Osaka-based Panasonic, whose workforce numbered 366,937 at the end of March this year.
The planned job cuts will mean roughly a 10% reduction from March 2010 when Panasonic had 384,586 employees.
Company president Fumio Ohtsubo said the firm must integrate duplicated operations to boost the group's competitiveness. "We are planning to streamline businesses overlapping with those of Sanyo," he said.
Ohtsubo did not elaborate on how the jobs would be cut, but local media said the company would offer early retirement incentives mainly at overseas production bases as well as to employees at its headquarters.
Ohtsubo said the company braced itself for tough times after the 9.0-magnitude earthquake and tsunami on March 11 ravaged Japan's northern region, which was home to many electronic parts manufacturers. He said the disasters would depress Panasonic's sales in the April-June quarter by "several hundred billion yen."
"The earthquake hit many companies manufacturing materials and devices that are hard to substitute," Ohtsubo said. "It is hard to restore (the supply chain) in a short time," he said. He added that foreign customers' requests for verification that Panasonic products were not contaminated with radiation could delay restoration of the supply chain.
But the company managed to swing back to profit in the year to March, thanks to brisk sales offsetting the yen's strength and the impact of the March 11 disasters. It reported 74.0 billion yen (US$906 million) in group net profit for the fiscal year, reversing the net loss of 103.5 billion yen a year earlier.
Operating profit surged 60.3% to 305.3 billion yen with sales up 17.2% at 8.69 trillion yen.
Panasonic gave no forecast for the current fiscal year to March 2012, saying: "It is difficult to assess the impact of the Great East Japan Earthquake."
Copyright Agence France-Presse, 2011