Panasonic Plans 10,000 Job Cuts, Projects $900 Million in Restructuring Expenses

TOKYO: On Friday, Panasonic Holdings announced that it plans to reduce its workforce by 10,000 employees and anticipates restructuring expenses of 130 billion yen ($896.06 million) in this fiscal year as part of a company revamp. The electronics producer announced in a statement that it will implement the job reductions primarily during the current fiscal year, with half intended for Japan and the remaining half for international locations. The reductions will result from the consolidation of sales and indirect operations, along with site closures, business terminations, and employees in Japan opting for early retirement, it stated.

According to its website, Panasonic employs approximately 228,000 people globally. The company's reorganisation intends to enhance group profitability and aims for a 10 per cent return on equity, which is a profitability indicator, by the fiscal year ending March 2029. Panasonic announced it aims for a group adjusted operating profit of a minimum of 600 billion yen in the fiscal year ending March 31, 2027, in part due to restructuring its consumer electronics sector, shutting down unprofitable ventures, and optimising IT investments. The firm stated it will assess the operational effectiveness of its subsidiaries, especially in sales and administrative sectors, as part of its revision of the restructuring unveiled in February.

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Nearly 50 per cent of the restructuring expenses will be recorded in its Lifestyle division, which encompasses home electronics and heating and ventilation systems, while an additional 40 per cent will be allocated to "other" sectors, including its holding company. It did not anticipate incurring any restructuring expenses in its energy sector. Panasonic predicted a 39 per cent rise in operating profit for its electric vehicle battery production segment this fiscal year ending March 31, 2026, adjusting it to 167 billion yen due to anticipated growth in battery and energy storage system sales. The energy sector, which produces batteries for Tesla and other car manufacturers, generated 120.2 billion yen in the year ending in March, falling short of its expected 124 billion yen projection. Panasonic projected a 13 per cent decrease in operating profit for its entire business this fiscal year, estimating it at 370 billion yen.