Panasonic expects 380 bil. yen annual loss, to cut 15,000 jobs

TOKYO, Feb. 4 Kyodo - Panasonic Corp. said Wednesday it will cut about 15,000 jobs worldwide by the
end of March next year as it expects to incur 380 billion yen in group net loss
for the business year ending next month, its first red ink in six years, due to
weak sales and a stronger yen.
The projected loss for fiscal 2008 compares with a net profit of 281.88 billion
yen in fiscal 2007 and contrasts with a record-high 310 billion yen profit the
firm projected in April last year.
To cope with its deteriorating earnings, Panasonic, formerly Matsushita
Electric Industrial Co., said it will close down 13 domestic and 14 overseas
production bases by the end of next month as part of its accelerated
restructuring measures.
The 15,000 jobs losses will be divided roughly equally between Japan and abroad
and affect both permanent and temporary employees, the firm said.
''The bottom is not yet foreseeable,'' Makoto Uenoyama, a Panasonic director in
charge of financing, told reporters, referring to shrinking demand for personal
computers, audiovisual equipment and other products amid the global economic
slump.
''We will continue to implement restructuring reforms and other urgent business
measures in fiscal 2009,'' he said. ''By strengthening our management health
through such moves, we intend to recover faster than any other rivals.''
The Osaka-based electronics giant cut its original profit projection by more
than one-tenth to 30 billion yen in November, and it downgraded its earnings
forecast again this time.
With the latest revision, Panasonic joins a growing list of Japanese high-tech
companies predicting they will fall into the red in fiscal 2008, including Sony
Corp., NEC Corp. and Toshiba Corp.
Panasonic said its earnings were hit hard by ever-intensifying global price
competition especially on flat-panel televisions as well as weak sales of
digital cameras and audio equipment among other products.
In addition to weakening demand and the yen's steep appreciation against other
key currencies, increasing appraisal losses on its equity holdings, stemming
from the stock market turbulence, and expanding restructuring costs weighed on
its earnings, Panasonic said.
For the current business year ending March 31, Panasonic now expects 60 billion
yen in operating profit, down 88 percent from the previous year, on 7.75
trillion yen in sales, down 15 percent.
The company said it will reduce its year-end dividend from the previously
projected 22.5 yen per share to 7.5 yen. As a result, Panasonic plans to pay a
total of 30 yen in dividend per share for the whole of fiscal 2008, compared
with 35 yen in fiscal 2007.
Panasonic also said it will cut remuneration for directors by 10-20 percent and
for managers by 5 percent, starting from February.
Reflecting its struggling mainstay TV business, Panasonic said it will postpone
by half a year the start of production at its flat-panel TV factories currently
under construction in the cities of Amagasaki and Himeji in Hyogo Prefecture,
western Japan.
For the April to December period, Panasonic said its group net profit plunged
70 percent from a year earlier to 65.38 billion yen and operating profit fell
34 percent to 254.52 billion yen, with sales down 9 percent to 6.22 trillion
yen.
==Kyodo