14 DAY TRIAL // With more and more companies feeling the pain of the global economic downturn, news of Panasonic planning to shed approximately 15,000 jobs comes as little surprise. The company's announcement will represent the second significant round of layoffs in Japan's electronics industry, in less than a week. As with other companies, Panasonic too is feeling the effects of the low global economy.
The giant manufacturer has just revised its forecast for the financial year results, with the company now projecting a net loss of 380 billion yen or approximately $4.2 billion for the year that will end on March 31, which is significantly lower than what the company initially predicted on November 27, namely a 30 billion yen profit. By comparison, Mitsubishi and Mazda now expect net losses of 60 billion and 13 billion yen, respectively.
“Business conditions have worsened particularly since last October,” Panasonic said in a statement, “due mainly to the rapid appreciation of the yen, sluggish consumer spending worldwide and ever-intensified price competition.”
As part of a plan to reduce some of the expected loss, Panasonic is expected to close 13 manufacturing sites in Japan and 14 abroad, changes that are scheduled to take place before the end of March. In addition, the company will cut its total workforce by about 5 percent, which means that roughly 15,000 workers will have to leave their jobs by March next year. According to reports, half of said workforce reduction will happen in Japan.
Panasonic is one of the companies that have suffered from the impressively low demand for consumer electronics like plasma TVs and household appliances, two business segments that Panasonic is well known for. In addition, manufacturers in Japan, including Sony, Sanyo, Canon and Nikon, have suffered from the appreciation of the yen in front of the dollar over the past year, something that Sony insisted on when announcing its financial losses.