Panasonic restructuring may exceed estimates
PANASONIC has said restructuring costs this year may exceed an initial estimate as the company takes charges to cut jobs and accounts depreciation of factories.
Restructuring costs may increase from the planned ¥41 billion announced in May, company president Kazuhiro Tsuga told reporters in Tokyo yesterday. He did not provide a new target.
Panasonic, planning to draft a new mid-term business strategy by February, may rearrange businesses and consider withdrawing from those sectors that could not be turned around in six years, Mr Tsuga said yesterday.
Japanese consumer-electronics makers such as Sony, Sharp and Panasonic are all restructuring businesses after competition with South Korea’s Samsung Electronics and Apple pushed them into losses.
“The cost increase could be positive if Panasonic uses it to slim down its headquarters,” said Masahiko Ishino, an analyst at Mitsubishi Morgan Stanley Securities.
“The company will need to explain if it is because of depreciation of factories, as the market thinks they were finished with that last fiscal year.”
Panasonic, seeking to turn around after a record loss, fell 0.6 per cent to close at ¥618 in Tokyo yesterday, extending its decline this year to 5.5 per cent.
The manufacturer, the biggest employer among publicly traded companies in Japan with 330,767 workers as of March, would reorganise its headquarters and eliminate redundancies to recover from the loss, Mr Tsuga said last month after taking over as president.
“We need to make a pre-emptive move that increases the costs,” he said yesterday. “We should allow our sales to fall to some extent, because we are focused on improving profitability.”
Panasonic may cut the number of staff at its headquarters to “a few hundred” from about 7,000, Mr Tsuga said.
Panasonic, Japan’s biggest appliance maker, said in May it may post net income of ¥50 billion for the year started April 1st, compared with a ¥772 billion loss the previous 12 months. The record loss included ¥267 billion in charges to write down assets at its TV business, ¥250 billion in similar charges for its battery subsidiary Sanyo Electric and ¥148 billion to promote restructuring. – (Bloomberg)