Sharp to slash workforce by 11,000, generate 200 bil. yen by March

Rabu, 26 September 2012 13:20

(OSAKA-Kyodo) Struggling Sharp Corp. plans to slash a total of 10,966 employees in Japan and overseas, while selling its assets to generate 213.1 billion yen by the end of March next year, according to the company's restructuring plan obtained by Kyodo News on Tuesday.

The plan, submitted Monday to financial institutions by the Osaka-based consumer electronics maker, shows it will cut wages and unload its overseas plants, a subsidiary and shareholdings in Toshiba Corp., while integrating four domestic sales companies around in April next year.

To implement the plan, Sharp will set up an emergency management committee headed by President Takashi Okuda on Oct. 1. The company aims to return to profitability in the business year starting next April with a group net profit of 14.6 billion yen, according to the plan.

The company plans to overhaul its liquid crystal display television business, strengthen its small and medium-size LCD panel business for smartphones, and substantially cut down its solar battery operations.

Sharp logged its biggest group net loss of 376 billion yen in fiscal 2011, which ended in March this year, following a slump in its LCD TV and panel sales.

In response to the latest restructuring plan, Sharp's main creditors Mizuho Corporate Bank and the Bank of Tokyo-Mitsubishi UFJ, as well as other lenders, are expected to provide a total of around 360 billion yen in loans.

By the end of March 2014, Sharp will cut 19 percent of its consolidated workforce of 57,170 as of the end of March this year, including reducing 3,100 domestically through voluntary and age-limit retirement. Other employees subject to the cuts include those working at TV assembly plants in Mexico, China and Malaysia that the company plans to sell.

In addition to the personnel reduction, the company will halve bonuses from October this year to September next year, and decrease wages to save almost 50 billion yen in personnel costs in fiscal 2012 compared to the previous year.

On the sales of its assets, the company plans to generate around 38 billion yen with the sales of overseas plants and obtain 25 billion yen by selling U.S. solar power generation firm Recurrent Energy LLC.

The plan also includes unloading its shareholdings in Toshiba for 1.6 billion yen and selling its building in Tokyo's Shinjuku Ward for 3 billion yen.

The company will consolidate its home appliance, system, office equipment and solar battery sales companies into one company, tentatively called "Sharp Marketing Japan," and reorganize them into three groups -- for consumers, for companies and for solar batteries.

Under the emergency management committee to be headed by Okuda, the company will establish six subpanels to discuss such issues as cooperation with other companies and improving financing.

Meanwhile, the plan does not show specifics about Sharp's ongoing negotiations with its Taiwanese business partner Hon Hai Precision Industry Co. to revise the terms of their capital tie-up agreement.