Sharp Corporation (ADR) (OTCMKTS:SHCAY) a Japanese electronics manufacturer, seeks to reduce its workforce by over 12%, as part of the global restructuring program anticipated to cost more than $1.7 billion, says a report from the Reuters citing a person aware of the plan. The decision concerning reorganization is owed to the huge losses incurred by the company, as it looks to post its third annual net-loss in four years.
Is it working on another bailout?
Of around 6000 jobs to be cut, half will be in Japan through early retirement and the rest will be actualized overseas, as per the report. By the end of 2014, the company was reported to have 50,000 employees, which are going to be reduced to an unknown number after the commencement of the proposed restructuring program.
Sharp Corporation (ADR) (OTCMKTS:SHCAY) is on track for third annual net loss in four years due to poor sales of smartphone screens in China along with an unprecedented comeback by its rival Japan Display, which poured more cold water on the recovery efforts of the firm, says the report.
In regard with this, it is expected that Sharp’s CEO Kozo Takahashi has been discussing the matter with company’s main lenders, in an effort to rescue the firm for the second time since 2012, asserted people familiar with the issue. In September 2012, banks agreed to bail out Sharp with loans and credit lines worth $3 billion as per today’s exchange rates.
How Sharp plans to cut costs?
Until now, Sharp Corporation (ADR) (OTCMKTS:SHCAY) has bid farewell to the European market, and has terminated solar panel businesses in Europe and the United States. According to Nikkei, Sharp could also cast off its North American television business along with trimming down the sales division in the same region.
Other reform measures include shutting down its TV factory in Mexico and lowering of the pay scale for the workers in Japan. In response, the company has voiced that it is considering different options to restructure its business, however no decisions have yet been made. A medium-term business strategy including details about the company’s restructuring program is due to be out in May this year.