Panasonic continues to make drastic changes to their different businesses to improve the company’s standing and the latest “victim” is their chipmaking workforce. Reports say that they intend to reduce by half their labor force that produces their semi-conductor chips and is even considering selling some of their overseas plants.
The Japanese semi-conductor business has been directly affected by stiff competition from South Korea and China and a lot of these companies have been spinning off their chipmaking operations as their profit margins continue to shrink. Panasonic currently has plants in the Toyama and Niigata prefectures, and in other countries like China, Indonesia, Malaysia and Singapore. The reduction in their 14,000 strong chipmaking laborers will most likely affect the ones outside of Japan. While the company is trying to improve their earnings, this move will actually cost them an estimated 50 billion yen for the fiscal year that will end in March. But since this business has incurred them an operating loss of 184 billion yen last fiscal year 2012, it is no surprise that they are making these drastic cuts. There are also reports that they will be selling some of the overseas plants to Israeli chip manufacturer TowerJazz.
Panasonic President Kazuhiro Tsuga’s goal for the company is to remove the businesses that have been hemorrhaging money and focus on the higher-margin products that can stop their losses for the past few years. It was reported earlier this month that they will stop producing plasma television panels by March 2014 and they have also exited the domestic smartphone market. Last month, the consumer electronics conglomerate sold their healthcare business in a $1.67 billion deal to a US private equity firm.
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