Home / World Business
Sat, Feb 07, 2009 - Page 10 News List

Sharp expects its first-ever operating loss, slashes jobs

AFP , TOKYO

Japan’s Sharp Corp said yesterday it expected its first-ever operating loss this fiscal year and would eliminate 1,500 jobs as its revenue from high-end televisions drops sharply in the recession.

Sharp expects an operating loss of ¥30 billion (US$335 million) in the year to March 31, down from a previous forecast profit of ¥130 billion.

It would be the first loss ever for the company, which started out making belt buckles and pencils and has become a leader in liquid-crystal-display (LCD) televisions. Sharp has reported earnings since 1953.

The company posted an operating profit of nearly ¥184 billion in the previous year.

Sharp said it would eliminate 1,500 jobs by the end of the fiscal year next month of non-permanent workers at its factories.

“We have decided not to renew 1,500 contract workers in Japan,” Tetsuo Onishi, the company’s director for accounting, told a news conference.

“By doing so, we shall build a human resource structure that meets the size of sales,” Onishi said.

Top managers will also accept pay cuts of up to 35 percent over seven months and forgo bonuses, the company said.

In the first nine months of the year, Sharp said that its core LCD business took a beating because of the global downturn.

Even though sales of large LCD televisions rose, revenue decreased as retail prices tumbled, the company said.

Sharp also suffered from a sharp drop in sales of mobile telephone handsets because of a saturated market in Japan, it said.

“We stand in a situation where we are not able to catch up with the rapid fall in prices,” Onishi said.

“In terms of the demand and supply conditions for LCDs, we believe we are hitting the bottom in the January-to-March quarter. Things should improve from April on,” he said.

Sharp was also hit by special factors including an extraordinary loss of nearly US$500 million in the third quarter owing to the plunging value of its investments in the stock market.

The company was also paying off a fine — estimated at US$120 million — imposed by US authorities for fixing prices of LCD screens with its competitors.

The electronics maker said it now expected a net loss of ¥100 billion for the year, as opposed to an earlier forecast of a net profit of ¥60 billion.

For the first nine months, Sharp posted a net loss of US$37.8 billion as opposed to a profit of US$72.9 billion in the same period a year earlier.

This story has been viewed 1738 times.
TOP top