Sharp considers shedding 5,000 jobs worldwide

March 23, 201510:15 am360 views
Sharp considers shedding 5,000 jobs worldwide
Sharp considers shedding 5,000 jobs worldwide

Struggling electronics maker Sharp Corp. is considering shedding 5,000 jobs, or about 10 percent of its global workforce, informed sources said Thursday.

To slash fixed costs, Sharp will also look at reducing salaries in Japan, the sources said.

The fresh downsizing plan will likely subject Sharp’s management to criticism for failing to meet its earlier goal in 2012 of cutting more than 10,000 jobs domestically and overseas. The company cited delays in divesting overseas operations as the reason for missing the goal.

Sharp is expected to receive ¥200 million in financial assistance, including through a debt-equity swap arrangement. It is currently in talks with its main creditors, Bank of Tokyo-Mitsubishi UFJ and Mizuho Bank, the sources said.

Sharp last trimmed payroll in the year ended in March 2013, when it logged a consolidated net loss of ¥545.3 billion mainly due to massive losses on investments related to its liquid crystal display business.

In Japan, it is expected to shed 3,000 of its 24,000 employees under a voluntary early retirement program. The remaining 2,000 jobs will be eliminated mainly via restructuring, such as by closing its television plant in Mexico.

The cuts are expected to cost the embattled electronics maker some ¥30 billion in additional restructuring charges, the sources said. The personnel reductions will be included in a business rehabilitation plan to be released following the talks with its creditors, they said.

The size of the staff cut matches the one made in Sharp’s early retirement program in 2012, when more than 2,900 employees were let go, triggering about ¥25 billion in retirement related expenses.

The move comes as the Osaka-based company is expected to post a group net loss of around ¥200 billion for the business year ending March 31. Its main creditor banks are demanding more aggressive turnaround steps.

On March 5, President Kozo Takahashi met with executives of the creditor banks to seek support for the firm’s rehabilitation.


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