Electronic component maker TDK on Oct. 31 said that it would cut its global workforce by 11,000, or roughly 12%, and lowered its forecasts due to a strong yen, Thai floods and slow demand.
The reduction comes amid other measures to boost profitability and would take place over a one to two-year period, a TDK said, without giving a regional breakdown of the job cuts.
The group currently employs around 88,500 people, the spokesman said.
The decision to cut the workforce came "as we face many negative factors such as the impact of the great earthquake, the appreciation of the yen and the effects of the Thai floods, which resulted to the downward revision," the spokesman said. "We have yet to decide on details including how to reduce our workforce at home and overseas from now on."
The company, once famous for its audio cassette and video tapes, is now better known for its data storage components and heads for hard disk drives. It has been hard hit by the impact of the March earthquake, a strong yen that erodes repatriated overseas earnings, and the recent Thai floods.
TDK also reported a 74.3% drop in fiscal first half net profit from a year earlier to 6.7 billion yen (US$84.4 million).
In the six months from April to September, the group suffered a decline in sales of electronic components, which it supplies to sectors such as automakers and consumer electronics firms.
The firm is one of hundreds of Japanese companies whose production has been hit by Thailand's worst flooding in decades, and output at its four plants there has been suspended. Two of them remain inundated by floodwaters.
The disasters are one factor behind the company's decision to revise down its earnings projections for the fiscal year ending March 2012.
It now forecasts a full-year net profit of 20 billion yen, slashed from an earlier forecast of a 50 billion yen net income and represents a 55.8% decline from annual profits in the previous year.
TDK also lowered its annual operating income forecast to 35 billion yen from 67 billion, while sales were seen lower at 820 billion from an earlier forecast of 890 billion.
The company now expects the dollar to average 76 yen for the fiscal second-half and the euro to average 105 yen, compared with earlier forecasts for 80 yen and 110 yen, respectively. Japan on Oct. 31 intervened in currency markets to weaken the unit after it touched a fresh record high against the US dollar, amid concerns that its strength could undermine the nation's fragile economic recovery.
Copyright Agence France-Presse, 2011
