Panasonic set to cut 15,000 jobs

[LahoreEstate]

Japanese electronics group Panasonic is to cut 15,000 jobs and close 27 plants worldwide as it seeks to reduce costs.

The world's largest maker of plasma TVs said it expected a net loss of 380bn yen ($4.2bn, £2.9bn) for the financial year to 31 March.

The company has been hit by a stronger yen and falling sales amid the global economic downturn.

Also on Wednesday, Japanese carmaker Mitsubishi forecast its first annual loss for three years.

It said it expected a net loss of 60bn yen for the year to the end of March, compared with a profit of 34.7bn yen a year earlier.

Amid a slew of downbeat news, Casio Computer, a maker of cameras, digital watches and mobile phones, also cut its outlook for annual net profit to 1.5bn yen from 13.5bn yen, reporting a 87% drop in net income for the April-December period.

Falling sales

The announced job cuts represent about 5% of Panasonic's workforce and will be implemented by the end of March 2010.

RECENT JOB CUTS BY JAPANESE ELECTRONICS COMPANIES
NEC - 20,000
Sony- 16,000
Panasonic - 15,000
Hitachi - 7,000

The company said that half of the cuts would take place in Japan and the other half would be overseas.

Panasonic's UK headquarters is based in Bracknell, Berkshire.

It employs more than 1,000 staff at its Cardiff base and a further 500 workers in Newport make communication equipment.

The company is hoping to cut its costs by 100bn yen worldwide in the next financial year.

Panasonic's loss in the current business year will be the company's first in six years.

It is also set to be bigger than analysts had expected. In 2007, Panasonic made a net profit of 281.9bn yen.

"Sales fell in all our business segments in the third quarter [to the end of December]. We expect sharper sales declines in this quarter, and profits are likely to shrink in every segment," Panasonic director Makoto Uenoyama said at a news conference.

Despite challenging economic environment, Panasonic is in the process of buying its struggling rival Sanyo Electric for $9bn.

Recession

Other Japanese electronics firms are also set to report full-year losses, and the rest of the economy is also suffering.

Japan's economy slipped into its first recession in seven years in the third quarter of last year.

Last week, Japanese electronics giant NEC announced that it was going to cut 20,000 jobs worldwide by March 2010 and Hitachi said it would cut up to 7,000 jobs.

Sony is also cutting 16,000 jobs and closing five or six plants.

Among other companies, carmaker Mazda said on Wednesday it would cut 500 more jobs in Japan, eliminating a total of 2,000 temporary workers in the country.

http://news.bbc.co.uk/2/hi/business/7868966.stm