Panasonic Predicts Loss, To Cut Jobs, Plants

By Steve Smith -- TWICE, 2/9/2009

Osaka, Japan — Panasonic is forecasting a $4.3 billion loss for its fiscal year, ended March 31, and announced layoffs of about 15,000 employees and the closing of 27 plants worldwide.

Panasonic said last Wednesday it will split the layoffs between Japanese and overseas staff and will also split the plant closings, some of which have already closed, the company said, between Japanese and overseas facilities. The layoffs are estimated in various media reports to be about 5 percent of its total worldwide workforce.

Panasonic, like other Japanese CE makers that rely heavily on exports, have been hit by a double-digit increase in the value of the yen compared to the U.S. dollar (around 90 yen to the $1) and the euro. (See story on p. 18.) Also, slumping demand for CE due to the worldwide recession and price competition has hurt both sales and operating profits.

Panasonic began this week to restructure its U.S. operations. (See p. 1.)

Restructuring costs are now estimated at $3.9 billion, compared with the $2.1 billion forecast by Panasonic for the fiscal year on Nov. 27, 2008.

In its fiscal third quarter, ended Dec. 31, 2008, Panasonic's net sales dropped 20 percent to $21 billion and the company had a net loss of $705.8 million. Its net income for the previous year's third quarter was $1.3 billion.

In its digital AVC networks unit, which includes consumer electronics, information and communications equipment, sales for the quarter were down 23 percent year on year, with A/V sales down 21 percent and information and communications equipment down 25 percent.

For the first nine months of the fiscal year the digital AVC networks unit had lower sales of 7 percent. Despite increased sales of flat-panel TVs, Panasonic said overall A/V sales were down 1 percent due to sales declines in digital cameras and audio. In information and communications, “sluggish sales of PCs and peripherals, and automotive electronics led to a 13 percent decrease in overall sales.”

Panasonic said global sales of its flat-panel TVs and digital cameras for the first nine months of its fiscal year were both down 5 percent in the Americas.