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Panasonic to slash 15,000 jobs, shut 27 plants worldwide

The world's largest maker of plasma TVs makes deep cuts to cope with the global slowdown. It posts a loss in its fiscal third quarter and forecasts its first annual loss in six years.

February 05, 2009|Associated Press

TOKYO — Panasonic Corp., sinking into what it expects will be its first annual loss in six years, said Wednesday that it was slashing about 15,000 jobs and closing 27 plants worldwide. It joins a string of Japanese companies making deep cuts as they cope with the global slowdown.

Plunging consumer demand, lower gadget prices and the soaring yen, which erodes overseas income, are battering Panasonic, the world's largest maker of plasma TVs. It said Wednesday that it swung to a loss of 63.1 billion yen ($709 million) for its fiscal third quarter ended Dec. 31, compared with a profit of 115.2 billion yen the previous year.

Quarterly sales dropped 20% to 1.880 trillion yen from 2.345 trillion, with overseas sales decreasing 29% and Japanese sales down 10%.

The Osaka-based manufacturer of cellphones, batteries and camcorders also slashed its forecast for the fiscal year through March to a loss of 380 billion yen ($4.2 billion). The last time Panasonic reported an annual loss was for the fiscal year that ended March 2002, when a global electronics slump and massive restructuring costs contributed to 431 billion yen in red ink.

Since then, the company has been shedding money-losing businesses and focusing on key products such as plasma televisions to turn itself around. But the recovery couldn't hold up against the global slowdown set off by the U.S. financial crisis. Sales slid in a variety of products, including flat-panel TVs, DVD recorders, microwaves, lamps and semiconductors, it said.

The planned job cuts at Panasonic -- half of them in Japan -- will come by the end of March 2010 and will amount to about 5% of its 300,000-strong global workforce.

Panasonic also will shut 14 overseas plants and 13 plants in Japan by the end of March to adjust production and cut costs. The company has 230 production sites around the world.

Panasonic is just the latest among Japan's big-name companies to announce massive job cuts and forecast losses in coming months. Sony Corp. is forecasting a loss of 150 billion yen for the fiscal year through March. Hitachi Ltd., NEC Corp. and Toshiba Corp. are also all forecasting big losses for the fiscal year.

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