Sanyo Electric Co. on Jan. 15 forecast zero net profit for the current financial year and announced 1,200 job cuts, saying the overhaul was needed to survive the economic crisis.
Sanyo, which is being bought by its bigger rival Panasonic Corp., scrapped a previous forecast for a net profit of 35 billion yen (US$394 million), predicting that its bottom line would just break even.
Sanyo will cut 800 jobs in Japan and 400 overseas, including both regular and temporary positions, Sanyo vice president Koichi Maeda said. The group will reduce the number of semiconductor plants abroad from seven to four,.
"We decided to implement additional restructuring because there is no other way for us to survive if we don't lower the break-even point," Maeda said.
Sanyo will cut the salaries of senior officials, including Maeda and president Seiichiro Sano, by 10%.
Japanese electronics giants have seen a swift deterioration in their fortunes as consumers tighten their purse strings to cope with recessions in major economies, prompting a wave of layoffs. Chip-maker NEC Electronics Corp. will cut 1,200 contract worker jobs by March, a company spokeswoman said on Jan. 15. Sony Corp. last month announced up to 16,000 job cuts worldwide.
In the first major realignment of Japan's electronics industry since the economic crisis erupted, Panasonic said last month it would acquire Sanyo Electric for up to nine billion dollars. Panasonic will buy Sanyo shares from investment firm Goldman Sachs and Japan's Daiwa Securities and Sumitomo Mitsui.
Sanyo has cut thousands of jobs as it attempts to return to profit. Recently it has tried to focus on environmental technologies including solar energy and rechargeable batteries. However, even sales of solar and rechargeable batteries are now declining and can no longer be relied on to offset losses elsewhere in the group, Maeda said.
Copyright Agence France-Presse, 2009