Japan's Matsushita Elec Works to cut 1,350 jobs
EDMUND KLAMANN, Reuters, Tokyo
Matsushita Electric Works Ltd, a major Japanese manufacturer of lighting and building products, cut its profit forecasts on Thursday and said it will reduce its workforce by more than eight percent by November 2003.
The affiliate of consumer electronics giant Matsushita Electric Industrial Co Ltd said the job cuts would reduce its payrolls to 15,000 from 16,350.
The Matsushita group, maker of Panasonic and National brand products, has been hit hard along with other Japanese electronics manufacturers by this year's info-tech slump.
Several of Japan's chipmaking and electronics conglomerates have announced thousands of job cuts in recent months and warned of consolidated net losses for the business year to next March that in some cases could exceed US$1 billion.
Matsushita Electric Works also released earnings results for the June-August quarter showing a consolidated operating profit of 6.7 billion yen ($55.55 million) on sales of 280.7 billion yen.
The quarter's operating profit margin of 2.4 percent was down from 5.6 percent for the full business year ended last November.
The company, which is reporting quarterly earnings this business year for the first time, did not provide comparable year-ago figures for its third quarter.
The manufacturer also lowered for the second time this year its forecasts for the full business year to Nov. 30, projecting a consolidated net profit of 27 billion yen on sales of 1.20 trillion yen, compared with a forecast on July 4 of 32 billion yen in net profit on 1.26 trillion yen in revenues.
It also trimmed its operating profit forecast for the year by 23 percent, to 50 billion yen from 65 billion yen.
"Adding to expectations of a prolonged global slump in demand for IT goods such as PCs and networking equipment, there has been a marked drop in domestic demand from capital investment and housing starts, and it is feared the terror attacks in New York will affect the world economy," it said in a statement.
The company, which also makes electronics materials, said it saw a particularly sharp drop in sales of materials for multilayer printed circuit boards, due to a slowdown in demand for personal computers and cellphones.
Matsushita Electric Works' shares ended 2.78 percent higher at 999 yen on Thursday, in line with the benchmark Nikkei average's 2.83 percent gain.
The shares have steadied in recent sessions after dipping to an 18-month low of 950 yen last week in line with weakness in the broader market as worries of a global recession deepened.
The share price has steadily retraced from a 10-year high of 1,569 yen hit in early May following the announcement of a share buy-back plan early in the year.
Matsushita Electric Industrial, the Matsushita group's flagship company, has yet to issue revised earnings forecasts for its full business year to next March, but the market is well- prepared for bad news after a profit warning from rival Sony Corp last week.
The Nihon Keizai Shimbun business daily reported early last month that Matsushita was expected to post a consolidated net loss of 100 billion yen in 2001/02, including an 85 billion yen charge for a voluntary early retirement program that is expected to trim its workforce by about 5,000.
The loss would be the company's first since 1995.
Matsushita Electric Industrial's shares ended Thursday trade up 6.74 percent at 1,521 yen, rebounding from a six-year low of 1,398 yen hit on Tuesday.