Sharp Cuts 1500 Jobs

Expects first loss ever this year

Sharp Corp. said on Feb. 5 it expected its first-ever operating loss this year and would eliminate 1,500 jobs as its revenue from high-end televisions drops sharply in the recession.

"We have decided not to renew 1,500 contract workers in Japan," Tetsuo Onishi, the company's director for accounting, said. "By doing so, we shall build a human resource structure that meets the size of sales." Top managers will also accept pay cuts of up to 35% over seven months and forego bonuses.

Sharp expects an operating loss of 30 billion yen (US$335 million) in the year to March 31, down from a previous forecast of 130 billion yen in profit. It would be the first loss ever for the company, which started out making belt buckles and pencils and has become a leader in liquid-crystal display (LCD) televisions. Sharp has reported earnings since 1953.

The company posted an operating profit of nearly 184 billion yen in the previous year.

In the first nine months of the year, Sharp said that its core LCD business took a beating due to the global downturn. Even though sales of large LCD televisions rose, revenue decreased as retail prices tumbled. Sharp also suffered from a sharp drop in sales of mobile telephone handsets due to a saturated market in Japan. "In terms of the demand and supply conditions for LCDs, we believe we are hitting the bottom in the January-March quarter. Things should improve from April on," Onishi said.

The company was also paying off a fine, estimated at $120 million, imposed by U.S. authorities for fixing prices of LCD screens with its competitors.

The electronics maker said it now expected a net loss of 100 billion yen for the year, as opposed to an earlier forecast of a net profit of 60 billion yen. For the first nine months, it posted a net loss of $37.8 billion as opposed to a profit of $72.9 billion in the same period a year earlier.

Copyright Agence France-Presse, 2009

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