Panasonic Corp. is the latest Japanese technology conglomerate to announce restructuring in the wake of a challenging business environment. Several other leading Japanese companies, including Sharp, Sony and Toshiba, have reorganized portions of their business to offset softening demand and sinking revenues in key business units, particularly consumer electronics and displays.
Earlier this week, Panasonic said it would spend roughly $2.7 billion over the next two years on restructuring, Reuters reported. The company did not indicate if that included layoffs.
Panasonic President Kazuhiro Tsuga said at a news conference that the company wants to expand its automotive and housing development businesses and pull back from consumer electronics. Panasonic’s TV unit in particular is facing increasing competition from low-cost, high-quality TV makers from Korea.
Sharp, Toshiba and Sony, which also play in consumer electronics, displays and TVs, have sought alternatives to support their once-lucrative display manufacturing businesses. Sony, Hitachi and Toshiba have formed Japan Display Inc., a company funded in part by the government of Japan, and Sharp has sought investment from global EMS Hon Hai Precision (which conducts business as Foxconn Technology Group) and US-based Qualcomm Inc.
Reuters reported Panasonic is set to report its second straight annual net loss and is under pressure to dump weak businesses and trim its payroll, even after more than 40,000 job losses in the past two years.