Matsushita to cut jobs despite return to profit

Kyodo

Matsushita Electric Industrial Co. is seeking to slash about 3,000 jobs from its group workforce in Japan and, by the end of March, shift production of unprofitable electronics parts and batteries offshore, company officials said Sunday.

Matsushita, known for the Panasonic brand, will introduce an early retirement program in July.

The latest streamlining program comes after Matsushita swung into the black on a group net basis last business year for the first time in three years, thanks to brisk sales of digital household appliances.

Matsushita officials say the efforts are intended to bolster the group’s competitiveness in the global market.

The news symbolizes the current situation of the economy, in which better corporate performance does not necessarily result in more jobs. The move may influence other Japanese manufacturers.

Matsushita Battery Industrial Co. plans to halve the number of its employees at its factory in Chigasaki, Kanagawa Prefecture, to about 300, the officials said. It will shift domestic production of nickel-hydrogen batteries to an affiliated firm in Wuxi, China.

Matsushita Electronic Components Co. will move manufacturing of aluminum electrolytic condensers used in audio products to Malaysia from its plant in Yamaguchi Prefecture, the officials said.

With this shift to Malaysia, about 1,600 employees will be subject to early retirement or job relocation, they said.

Matsushita will also call for early retirement in Panasonic System Solutions Co., a division developing information network systems for companies and public offices.

At the beginning of this year, Matsushita had about 78,000 employees in its domestic group companies.

It began an early retirement program in fiscal 2001 when earnings performance deteriorated.

About 13,000 employees applied for the program in its first year, and roughly 20,000 jobs have been slashed over the past three years, according to the officials.

Matsushita reported a group net profit of 42.15 billion yen for the business year that ended March 31, a turnaround from a loss of 19.45 billion yen in fiscal 2002.

The results sprang mainly from strong sales of digital home electrical appliances. The better earnings are also attributed to the radical restructuring of redundant work within the group.

However, Matsushita officials admit prospects remain tough. Prices of mainstay digital electronics products such as flat-panel TVs and DVD recorders have declined by more than 10 percent in the past year, and Japanese manufacturers face fierce competition with South Korean and Chinese rivals in the overseas markets, the officials say.