Huge Losses Force Sharp to Fire 5,000 People

Last year's record financial nosedive continues in 2012

By on August 2nd, 2012 17:11 GMT
Sharp has shown that Sony isn't the only company with large financial problems. The outfit lost an immense amount of money in the quarter ended on June 30, 2012.

That is the main cause behind the decision to take the default action when trying to cut one's losses: firing a whole bunch of people.

We've seen it happen before. A company, regardless of field, suddenly can't balance income and expenses, so it reduces the number of wages it has to pay.

In this case, Sharp will cut 5,000 jobs. The process will be finalized by March, next year (2013) and will be the first wave since 1950.

But we've gotten ahead of ourselves. We've yet to say exactly how much money the company had to see off between April and June.

The sum was 138.4 billion yen, which translates into $1.76 billion and 1.42 billion Euro, according to current exchange rates.

That is three times as much as the loss of 49.3 billion yen (about $628 million / 508 million Euro) of the same period in 2011.

Speaking of 2011, Sharp lost $4.7 billion / 3.83 billion Euro for the whole year, which doesn't paint a pretty picture for 2012.

Sharp will cut management position wages by 20 to 50% as well, but that won't really stave off the grim fate all that much.

For 2012, the corporation fears it will suffer a nosedive of 250 billion yen, or approximately $3.18 billion / 2.57 billion Euro.

The dark irony here is that Sharp did expect a loss from the start of its fiscal year 2012, but of a mere 30 billion, or $382 million / 309 million Euro.

Details on the evolution of each Sharp sub-division can be found on the Consolidated Financial Release. What remains is to see how the brand manages to get out of this, assuming it doesn't suffer a total collapse like Kodak.

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