Japanese electronics giant Sharp Corp yesterday said it was cutting thousands of jobs in a fresh restructuring plan aimed at keeping it afloat as the struggling firm posted a bigger-than-expected US$1.86 billion annual loss.
The ¥222 billion net loss (US$1.86 billion) — much bigger than an earlier ¥30 billion forecast — came as Sharp said it would cut about 10 percent of its 49,000-strong global workforce, including 3,500 jobs in Japan.
The firm said it hoped to swing to an ¥80 billion operating profit in the current fiscal year, but it did not give a net profit forecast.
Photo: EPA
The company said it would sell the building that houses its Osaka headquarters to raise cash, roll out unspecified pay cuts, and launch a drastic capital reduction plan in an attempt to ameliorate huge losses.
Sharp — a major Apple Inc supplier and leader in screens for smartphones and tablets — also said it would issue ¥200 billion worth of new shares with no voting rights to Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ.
“Our company is facing an extremely difficult situation,” Sharp president Kozo Takahashi told reporters. “By implementing these structural reforms, we believe we can see a concrete path toward recovery.”
Sales in the past fiscal year fell 4.8 percent to ¥2.78 trillion, Sharp said.
On Monday, the company lost more than a quarter of its market value following reports that it was planning a drastic capital reduction and the sale of preferred shares, spooking investors who worried about their holdings being diluted.
The stock lost 0.99 percent yesterday to close at ¥200 in Tokyo, before its results were released.
Sharp, like rivals Sony Corp and Panasonic Corp, has been working to move past years of gaping deficits, partly caused by steep losses in its television unit, which has been hammered by competition from lower-cost rivals particularly in Taiwan and South Korea.
The trio have launched huge restructuring plans with Panasonic emerging as the leader as it focuses less on consumer products and more on goods sold to other businesses.
Last month, Panasonic said that its annual profit soared 49 percent, crediting its lesser-known auto parts unit and lower costs.
Sony, by contrast, recorded a US$1.1 billion annual loss, but said it expects to swing back to profitability in the current fiscal year as it emerges from a corporate makeover.
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