July 7, 2005 – Sanyo Electric said Tuesday that it would cut 14,000 jobs, or 15 percent of its global work force, in a sweeping three-year overhaul effort, according to various news reports.
Sanyo said it planned to trim its work force in Japan by 8000 employees as it shrinks its factory capacity there by one fifth over three years. For this year alone, the company has designated some 24 billion yen ($215 million) to pay for a program to trim 3800 jobs in Japan. Sanyo, which has a worldwide work force of about 96,000 people, will also eliminate 6000 jobs overseas over the same three-year period ending in March 2008.
The cuts are part of a plan by Sanyo’s new management team to cut 70 billion yen ($627 million) from overall costs and halve the company’s 1.2 trillion yen ($10.75 billion) in debt over three years. The plan was announced Tuesday by chief executive Tomoyo Nonaka and president Toshimasa Iue.
Many of the cuts are expected in the semiconductor division, which has been struggling since a major earthquake hit the Niigata Prefecture in northern Japan last October and forced the company to close its chip plant there.
Sanyo lost a record 171.5 billion yen ($1.54 billion) for the year ended March 31 as weak sales of mobile phones and digital cameras compounded losses stemming from the earthquake. The company has forecast a narrower loss, 92 billion yen ($824 million), for the current fiscal year, which ends March 31, 2006.
Sanyo is aiming to bolster profits by focusing on its most competitive products, like batteries and solar cells. The company set a target to achieve an operating profit equal to 5 percent of revenue or more by the fiscal year ending in March 2008.
”We will no longer conduct operations that don’t produce profits,” Mr. Iue told reporters on Tuesday.