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(Bloomberg) — Panasonic Holdings Corp. is slashing headcount by 10,000, or more than 4%, part of a push to cull non-growth operations and boost profitability.
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The supplier of lithium-ion batteries to Tesla Inc. said the job cuts target 5,000 employees in Japan and 5,000 overseas and would take place mostly in the current fiscal year. The company expects about ¥130 billion ($895 million) in restructuring charges in the year to March.
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The personnel cuts are necessary to prepare the company for the next decade or two, Panasonic Chief Executive Officer Yuki Kusumi said during an earnings call.
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“I am truly sorry,” he said. “(But) if we don’t make drastic cuts to our fixed cost structure, we won’t be able to chase growth again.”
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The 107-year-old Osaka-based company will pivot to areas such as energy-efficient power generation and storage and data center power sources, while building on its EV battery and home appliance arms, according to an earnings presentation on Friday.
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For the current business year, Panasonic forecast net income of ¥310 billion, after factoring in the restructuring costs. Analysts on average had estimated around ¥357 billion. The company said it hasn’t factored in the impact of additional US tariffs.
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Panasonic, which has been ramping up battery production in the US, reported a bigger-than-expected 74% rise in net income for the March quarter. Sales from its US facilities are growing, but demand has been tumbling elsewhere, it said.
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The company oversees a vast array of businesses from hair dryers to elevators. In February it said it plans to streamline its operations, trim non-growth areas such as industrial devices and TVs and speed up a pivot through the use of artificial intelligence.
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Panasonic has improved profitability in its TV operations through partnerships, but that it wasn’t enough, Kusumi said. “We are looking into many possibilities including furthering our partnerships,” he said.
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(Updates with executive comment from the third paragraph.)
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