Panasonic Posts $4.2 Billion Loss - Cuts 15,000 Jobs, Closes 27 Plants
Panasonic Cuts Back
In 2008 Panasonic posted heavy quarterly losses and lowered annual forcast. Last week they announced and executed massive layoffs. Now, the company again says it will begin round 2 and cut 15,000 jobs (a full 5% of its workforce) and close 27 plants worldwide (13 in Japan). The job cuts will be completed by March 2010 and half of these will be in Japan. The world's largest maker of plasma displays posted a net loss of $709 million dollars for the fourth quarter 2008. For the fiscal year (ending March 31) they revised their numbers to indicate a net loss of $4.2 billion (yes, with a 'b') dollars. This is their first annual net loss in 6 years.
Panasonic cited the global economic downturn, a surge in the value of the yen, and price drops on plasma and LCD televisions for the losses. These cuts are meant to bolster the company over the next several years and provide a way for it to prosper once again, emerging strong from a slump that is taking it's toll on the industry. Lest you think Panasonic is an isolated case, NEC is eliminating 20,000 jobs, and Hitachi, Toshiba and Sony (who own joint LCD plants) have also recently announced thousands of job cuts.
Per an article in the International Herald Tribune:
The outlook for the business environment "has been extremely uncertain," Panasonic said. "Business conditions have worsened particularly since last October, due mainly to the rapid appreciation of the yen, sluggish consumer spending worldwide and ever-intensified price competition."
What does this mean to consumers? Look for mergers. Lots of them in the coming year or two. Many analysts are predicting that the current crisis may intensify pressure for some of these companies to join forces (or for smaller ones to collapse and be bought up by larger competitors with more cash on hand). Panasonic, for example, plans to buy out the Sanyo - a move that is awaiting approval from regulators.
