Japanese electronics giant Panasonic said it will cut 10,000 jobs globally, or about 4% of its workforce.
The announcement, made by Panasonic on May 9, is aimed at moving towards a leaner and more efficient business model. The cuts will be concentrated in the current fiscal year, with half taking place in Japan and the rest in international markets.
Measures include merging divisions, closing facilities, ending loss-making businesses, and implementing an early retirement program for employees in Japan.
The total restructuring costs amount to 130 billion yen ($896 million) in the current fiscal year as part of a comprehensive restructuring plan. CEO Yuki Kusumi admitted that it was with a "heavy heart" to announce the job cuts.
Panasonic currently has about 228,000 employees worldwide. The Osaka-based company makes products such as washing machines, refrigerators, solar panels, delivery robots, facial recognition technology, home fuel cells, and electric vehicle batteries.
Also on May 9, Panasonic announced that its profit for the fiscal year ending March 2025 was only 366 billion yen ($2.5 billion), down 17.5% from 443 billion yen the previous fiscal year. Revenue was 8.46 trillion yen ($58 billion), down 0.5%. The company cited the global economic slowdown and weak demand for electric vehicles as the main reasons. However, the domestic air conditioning and consumer electronics segments are still doing well.
The company expects to increase its operating profit by at least 150 billion yen ($1 billion) in the fiscal year ending March 2027 and 300 billion yen ($2.1 billion) in the fiscal year ending March 2029. The goal is based on governance reforms, the elimination of underperforming businesses and building a more flexible system to respond to changes in the business environment.
However, Panasonic warned that improving operating results will take time and that profits may continue to decline in the current fiscal year. Specifically, the company forecasts operating profit of 310 billion yen ($2.1 billion) in the fiscal year ending March 2026, on total revenue of 7.8 trillion yen ($54 billion).
The group said it will review the performance of its affiliates, especially in the sales and back-office divisions, based on a restructuring plan updated in February. Nearly half of the restructuring costs will be allocated to the Lifestyle business, which includes home appliances and heating systems, and about 40% to other operations, including the parent.
The electric vehicle battery business for Tesla and others is expected to increase operating profit by 39% this fiscal year to 167 billion yen, thanks to growth in sales of batteries and energy storage systems. It is preparing to supply batteries to Mazda and Subaru through new strategic cooperation agreements.
(according to AP, Reuters)