Japanese electronics giant Sharp has become the latest tech firm to announce swingeing job cuts, with 5,000 employees set to be culled in a bid to slash costs after it revealed losses in the last quarter of £1.1bn.
Sharp hasn’t been forced to make any redundancies in over 60 years but has been hemorrhaging money thanks to a slowdown in demand from China and the EU, as well as its domestic market.
The firm announced a net loss for the period April-June of 138.4 billion yen (£1.1bn), up from 49.3bn yen last year. Its annual forecast for the year ending 31 March 2013 is not much better, with net losses predicted to be a massive 250bn yen (£2.1bn), up from a previous forecast of 30bn yen.
Sales of LCDs, TVs, solar panels and mobile phones have all been affected by sluggish demand and “an ongoing price drop for products and devices”.
Sharp could also probably do without the hefty $388m settlement it and several other electronics firms agreed to pay to end legal action alleging involvement in a global LCD price fixing cartel.
There are no details as to where the axe will fall but 5,000 jobs amounts to just under ten per cent of Sharp’s entire workforce, so no region would appear safe.
The firm’s grand plan for digging itself out of this rather massive hole includes outsourcing production of more display products to Foxconn parent company Hon Hai, as previously announced.
It’s also looking to give its regional headquarters more autonomy, place more emphasis on providing services and generate new demand for “one-of-a-kind products” such as the IGZO LCD.
The company explained its future plans by stating:
As for the future outlook, we expect the business environment to remain unpredictable, with increased downside risks, including the possible return of a financial crisis in Europe, the appreciation of the yen, on-going deflation and energy supply issues in Japan.
To handle these economic situations and harsh business environment, Sharp will work hard on continuous creation of one-of-a-kind products and change into a new business model, with the aim to become a “globally competitive company”.