Sanyo Reports Plans to Reduce Work Force by 15 Percent
Sanyo Electric Co. Ltd. (Japan), a developer of rechargeable batteries, announced that it will reduce its global work force by nearly 15 percent, decrease production, and pare debt under a turn-around effort. Sanyo has been battered by plunging prices of consumer electronics products. Heavy damage to a factory by a major earthquake last year in northern Japan also dealt a blow to its computer chip-making operations.
Sanyo, which has a worldwide payroll of more than 96,000, is cutting 14,000 jobs — 6,000 in Japan and 8,000 overseas — although it didn't give a further country breakdown. Sanyo officials did not say how the jobs will be reduced. The company will also slash domestic factory space by about a one-fifth, discontinuing some lines. Sanyo is also planning to cut its debts now totaling ¥1.2 trillion ($10.8 billion) by ¥600 billion ($5.3 billion) by March 2008.
President Toshimasa Iue said the new management team hasn't decided yet which businesses to pull out of, but the company will focus on compressors, solar batteries and other batteries for electronics and vehicles. "We will no longer conduct operations that don't produce profits," Iue said.
Sanyo booked a loss of ¥171.5 billion ($1.5 billion) for the year ended in March, and forecasts a loss of ¥92 billion ($824 million) for this fiscal year, which ends March 2006. It is taking a charge of ¥90 billion ($806 million) this fiscal year to cover the costs of the latest plan.