Leading CE/digital camera brands Sony and Panasonic are both deep in the red, with Sony announcing plans to cut 10,000 jobs and Panasonic flagging a loss of close to US$10 billion.
Around half the planned Sony job cuts involve Sony’s chemical unit and a restructuring of its small and medium-sized liquid crystal display panels business, according to Japanese financial news service Nikkei.
It will merge its Sony Mobile display unit, which had about 2000 workers, with the small LCD panel businesses of Toshiba Corp and Hitachi into a new firm called ‘Japan Display’.
The company’s top seven executives, including outgoing chief Howard Stringer, whose replacement by deputy Kazuo Hirai was announced recently, would also give up their annual bonuses according to the report.
Sony employs around 168,000 staff around the world.
Sony’s projected loss in the 12 months until March this year stands at Y220 billion ($2.6 billion). This is the company’s fourth consecutive year in the red.
Sony has blamed tough competition and falling prices – particularly in the television category – slow demand, the impact of severe flooding in Thailand last year, and the high yen for its weak balance sheet.
During an earlier restructuring announced in December 2008 amid the global financial crisis, Sony cut about 16,000 jobs worldwide.
Panasonic has also recently replaced its president in the midst of an even poorer financial result, with pay cuts for its executives of between 10 and 30 percent starting in July a response to the firm’s deteriorating earnings.
Panasonic is expected to report a net loss of ¥780 billion ($9.3 billion) for fiscal 2011, one of its worst-ever performances.
Panasonic is focussing on the home appliance market to get it back to profitability. The company expects its fourth straight fiscal year of losses from its TV business, while its chip business also is in the red.
Panasonic acquired Sanyo Electric Co in 2009 to focus on rechargeable batteries and solar panels, but those businesses are now facing fierce competition from South Korean and Chinese rivals.
Japanese TV makers have been hit hard by the tough business climate as well as sharp price falls, with Sony, Panasonic and Sharp expecting to have lost a combined $17 billion in the fiscal year just ended.