Panasonic to cut 15,000 jobs
TOKYO (Reuters) - Japan's Panasonic Corp, the world's No.1 plasma TV maker, warned it would post an annual loss of $4.2 billion and said it would cut about 15,000 jobs as it grapples with a stronger yen and slowing demand.
The maker of Viera flat TVs and Lumix digital cameras joins a growing list of electronics makers stepping up restructuring in the face of a global slump that is shaping up to be nastier than the last major downturn in 2001 after the IT bubble.
Sony Corp, Toshiba Corp and Hitachi Ltd are all facing multibillion dollar losses, crippled by the double whammy of falling sales and a strong Japanese currency that eats into overseas profits when repatriated.
The yen's surge to a 13-year high against the dollar has also made Japanese electronics less competitive than goods from South Korean rivals such as Samsung Electronics, which are benefiting from a softer won.
"The market had high hopes for the flat TV business, but it now has no competitive edge overseas due to the strong yen and is contributing in a big way to the slump," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Panasonic, which ranks ahead of Samsung and LG Electronics Inc in the plasma TV market, cut its forecast for the year ending March 31 to a net loss of 380 billion yen ($4.2 billion) from previous guidance for a 30 billion yen profit.
The new forecast, which is slightly bigger than media reports earlier this week predicting a loss of 350 billion yen, reflects 345 billion yen in restructuring charges and a 9 percent cut in its sales estimate to 7.75 trillion yen.
Panasonic cut its annual dividend forecast by one-third to 30 yen per share.
The company, formerly known as Matsushita Electric, posted a net loss of 63.1 billion yen for the October-December quarter versus a year-earlier profit of 115.2 billion yen.
Quarterly operating profit tumbled 84 percent to 26.4 billion yen. For a graphic on Panasonic's historical quarterly operating profit, click here
"Sales fell in all our business segments in the third quarter. We expect sharper sales declines in this quarter, and profits are likely to shrink in every segment," Panasonic director Makoto Uenoyama told a news conference.
Panasonic said it would close 27 manufacturing sites in the current year to March, and carry out another round of plant closures of a similar scale in the next business year.
It also plans to cut around 15,000 jobs, including both full-time regular employees and contract workers. Half the cuts will be in Japan and half overseas. It has a global workforce of about 300,000 regular workers.
On top of dwindling sales of consumer gadgets, Panasonic's factory automation equipment operations have come under pressure as companies worldwide cut production and spending on manufacturing tools.
The company also said it would delay the start-up of its new LCD panel plant in western Japan by six months, to July 2010.
Although Panasonic dominates the global plasma TV market, it lags far behind Samsung, Sony and Sharp Corp in LCD TVs.
Sharp, set to unveil quarterly results and update its annual outlook on Friday, is likely to post its first-ever operating loss for the year to March due to slow sales and steep price falls, the Nikkei business daily said.
Before the announcement, shares of Panasonic closed up 1 percent at 1,092 yen, underperforming the electrical machinery subindex, which rose 3.5 percent.
(Additional reporting by Aiko Hayashi)
(Editing by Chris Gallagher)
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