In short
- Panasonic to cut 10,000 jobs, about 4% of its workforce, as part of a global restructuring plan
- The layoffs will be carried out in Japan and abroad, targeting support and sales units
- The move is part of a wider trend of Japanese conglomerates streamlining operations
As geopolitical uncertainty surrounds South Asia, Japanese electronics major Panasonic has announced a wide-ranging global restructuring plan, including the layoff of 10,000 staff about four percent of its workforce to boost profitability after reporting a sharp 17.5 percent drop in annual net profit.
In its fiscal year 2024 earnings release, Panasonic recorded a 0.5 percent decline in annual revenue, which stood at 8.46 trillion yen (circa 54 billion USD).
Amidst escalating geopolitical tensions between India and Pakistan, Japanese multinational Panasonic Holdings has announced plans to cut 10,000 workers worldwide roughly four per cent of its overall workforce of 230,000 under an aggressive corporate restructuring plan. The announcement comes as the company struggles with declining profits and prepares for a thorough internal review of operations.
Panasonic assured that 5,000 positions will be eliminated in Japan and 5,000 abroad, with the terminations aimed at support and sales units in several group companies. The restructuring effort was initially reported in an interview with Japan's Nikkei newspaper, in which CEO Yuki Kusumi stated:
"Layoffs are necessary to achieve better performance than other companies."
In its FY2024 earnings announcement, Panasonic registered a 0.5 per cent fall in yearly revenue to 8.46 trillion (around 54 billion USD). Of greater concern was the 17.5 per cent fall in net income to 366.2 billion (around 2.53 billion USD).
The company's internal restructuring will involve:
The layoffs will be carried out in accordance with Japanese labor legislation, the company said in an official announcement. The move is in response to increasing pressure from stiff global competition in electronics and electric vehicle battery industries, where it supplies Tesla with large volumes of cells.
Industry observers point out that the action is part of wider restructuring plans among Japanese conglomerates looking for streamlined operations in the face of weakening global demand and increased expenses.
The job cuts also come at a time of high geopolitical uncertainty in South Asia, especially along the India-Pakistan border, which continues to impact investor sentiment across global markets. Nevertheless, Panasonic's restructuring seems to be more the result of internal cost issues than external political considerations.
With this move, Panasonic is joining an increasing number of technology and manufacturing behemoths in drastic measures to stay profitable in the face of changing consumer habits, supply chain disruptions, and the shift towards green energy alternatives.
