Hon Hai Precision Industry Co (鴻海精密) yesterday said the company has informed Sharp Corp’s employees that layoffs will be necessary to help the struggling Japanese firm restructure its finances.
Hon Hai confirmed the news after Bloomberg reported that chairman Terry Gou (郭台銘) warned in a letter to Sharp employees of the need for layoffs after the Japanese manufacturer on Thursday reported a net loss of ￥256 billion (US$2.35 billion) in the year to March, surpassing the ￥222 billion loss posted in the previous year.
On the same day, Hon Hai vice chairman Tai Cheng-wu (戴正吳) was named by Sharp’s board of directors as the company’s new president.
Hon Hai said the letter was signed by Gou and Tai, the first Taiwanese president in the century-old Japanese company’s history.
According to the Bloomberg report, Gou said in a letter to Sharp’s employees: “It is with a heavy heart that I say to you the results were subpar.”
After a close review of Sharp’s operations, he found a “level of inefficiency throughout Sharp,” so there is a “very regrettable need” to cut the workforce, Gou said in the letter.
However, Gou promised he would reward workers at Sharp based on their performance, according to Bloomberg.
“My hope is all the necessary reviews and procedures will be completed swiftly and without issue so we can all get down to the important job of turning this great company around and helping it return to a global leadership position,” Bloomberg cited Gou as saying.
The Bloomberg story did not specify the number of job cuts, but a report in the Mainichi Shimbun said that Sharp could lay off about 7,000 workers, or about 16 percent of its total global workforce.
Hon Hai signed an agreement on April 2 to acquire a 66 percent stake in Sharp for ￥388.8 billion.
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