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Panasonic: Layoffs, But Profit Reported

5/02/2011 12:00:00 AM Eastern

OSAKA, JAPAN – While Panasonic reported last
week it will layoff about 17,000 workers worldwide,
the company announced an annual profit and higher
sales for fiscal year 2011 ended March 31.

Panasonic, which as of March 31 had 366,937
employees worldwide, expects total employees to
be at 350,000 by March 31, 2013 when the next
fiscal year ends as part of a reorganization. On the
same date in 2010 total Panasonic had 385,000
employees worldwide, a spokesman said.

Panasonic expects the restructuring charges will
be the 110 billion-yen level in fiscal 2012 and the 50
billion yen level in fiscal 2013.

Some of the layoffs involve Sanyo and Panasonic
Electric Works which, as of April 1, officially became
part of the corporation worldwide, and would
include a consolidation of management and operations
functions, according to a company spokesperson.
But the layoffs are also clearly a response
to the sluggish economy, the current market for CE
products in key worldwide regions and the continued
economic impact of the Japan earthquake.

As part of the reorganization its AVC networks,
the bulk of its CE business worldwide, and its home
appliances and related businesses, will be part of a
new consumer sector.

Also, as part of the restructuring Panasonic will
increase the purchase of LCD panels from outside
vendors and transfer a production line of its third
domestic PDP plant in Amagasaki City, in Japan, to
China to reduce costs. The company will also focus
on panel sizes with which it can give full play to its
competitiveness in flat panels. For TV sets, it will
focus on improving profitability by introducing TVs
with distinctive features, while stepping up production
overseas, the company said.

As for the 2011 fiscal year, income before income
taxes was 178.8 billion yen from a loss of 103.5 billion yen in fiscal 2010.

Operating profit improved by 60 percent to 305.3
billion yen from 190.5 billion yen in fiscal 2010 due
mainly to strong sales on an annual basis, and a
wide range of exhaustive cost reductions, including
streamlining of material costs and other general expenses,
Panasonic reported.

Consolidated group sales for fiscal 2011 increased
by 17 percent, to 8,692.7 billion yen from 7,418 billion
yen in fiscal 2010, due mainly to the inclusion
of sales of Sanyo Electric and its subsidiaries in the
company’s consolidated financial results from January
2010 onwards.

By business segment, the digital AVC networks’
sales amounted to 3,304 billion yen, down 3 percent
from 3,409.5 billion yen a year ago. Despite favorable
sales of Blu-ray Disc recorders, this result was due
mainly to sales declines in mobile phones and digital
cameras.

Operating profit increased by 32 percent, to 114.9
billion yen from 87.3 billion yen, mainly as a result of
fixed cost reduction and streamlining efforts, offsetting
the impact of a sales decline and yen appreciation,
Panasonic said.

In commenting on the effects of the Japanese
earthquake and tsunami in March Panasonic said
while operations at factories in the disaster-hit
region have been recovering steadily, disruptions
in its supply chain are still affecting the group’s
operations.