Sharp cuts jobs, may need 200 billion yen in aid

19 Mar

Japanese flat panel maker Sharp is in hot financial waters and its CEO Kozo Takahashi reportedly asked for 150 billion Japanese yen (US$1.24 billion) in turnaround fund from Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ on March 5. Recent media reports suggested that Sharp is planning large-scale job cuts and may need over 200 billion yen in aid to keep it afloat.

Nikkei reported March 19 that Sharp plans to announce a voluntary retirement program for Japanese employees in the 2015 fiscal year, in an effort to cut 3,000 jobs. The job cuts will incur a cost of some 30 billion yen. In 2012, the company launched a voluntary early retirement plan, after its flat panel business incurred a loss of over 900 billion yen in the 2011-2012 fiscal year.

According to the news report, Sharp has notified the two banks of the planned job cuts, which will lay off some 10 percent of its staff, based on its domestic staff size of 24,000 people as of December 2014. In addition, to reduce personnel expense, Sharp also plans to cut wages for its domestic employees by 1.5 percent this year. Job cuts are also planned for its overseas locations; more than 2,000 people, or 10 percent of Sharp’s overseas staff, are expected to be let go.

The report by Nikkei also pointed out that in order to re-structure its money-losing business and to carry out the early retirement program, Sharp will have to ask for 200 billion yen, instead of the previously disclosed 150 billion yen from the banks to tide over.

(Article authorized by MoneyDJ; photo courtesy of Flickr/Matt Watts CC BY 2.0)