PARIS – Japan's Sharp Corp. reported a significantly wider fiscal first quarter loss and unveiled its intention to cut 5,000 jobs by the end of March 2013. This will be the company's first personal downsizing since 1950.
For the quarter ended June 30, Sharp posted a 138.40 billion yen net loss, up from 49.28 billion yen a year ago. The operating loss amounts to 94.13 billion yen, compared with a profit of 3.53 billion yen a year earlier. Revenue declined to 458.60 billion yen, compared with 640.35 billion yen.
Sharp, whose television, LCD and solar panel operations have been struggling, said the job reductions would contribute to cut fixed costs by 100 billion yen. The group had 56,756 employees worldwide in March 2012. The workforce is expected to be cut by nearly 9 percent, to 51,700 people, by March 2013.
In a financial presentation, the group noted that it would solicit voluntary retirement in addition to mandatory retirement and off-balance-sheet arrangements.
The personal downsizing represents one of the four restructuring initiatives the company unveiled yesterday (Aug. 1st) to "shift to growth areas". These initiatives include the reorganization of business groups with the consolidation to four business groups: Digital information appliances group; Health, Environment and Energy Solutions Group; Business Solutions Group; Devices Group.
The company also cited the review of framework at plants/bases with the downscaling of the Tochigi plant and the Katsuragi plant, as well as the head office streamlining.
On a side note, Sharp said it has revised its forecast of financial results for the six months, ending Sept. 30, 2012, and the year ending March 31, 2013, as well as the dividend forecast for the year ending March 31, 2013.
The company said this results from a sluggish business performance in the quarter, a more severe business environment than initially expected, including the risk of an economic downturn in the U.S., Europe and other regions, slow demand in Japan, as well as restructuring charges.