Japan Inc. is suffering and the supply chain is bearing the cost.
Sumco Corp., a supplier to Sony Corp. and Toshiba Corp., said Thursday it will cut 1,300 jobs.
Auto windshield maker Nippon Sheet Glass Co., which sells to Mazda Motor Corp., said it will cut 3,500 jobs.
They join NEC Corp., which manufactures telecommunications equipment and components, which said last month it will eliminate 10,000 positions.
The yen’s 7 percent surge against the dollar in the past 12 months has widened losses at Sony, Mazda and Sharp Corp., which plans to halve TV production at its biggest factory to reduce inventory. Manufacturers have been forced to both relocate production outside of Japan and to press their suppliers for cost cuts.
“Once giants like Sony and Sharp fail, the entire supply chain falls into the red,” said Mitsushige Akino of Ichiyoshi Investment Management Co. “The yen is killing Japan’s manufacturing base.”
Sumco forecasts a full-year loss of ¥85 billion and asked Sumitomo Metal Industries Ltd., which owns a 28 percent stake, to buy preferred shares. Sumco will also take a charge of ¥58.2 billion for the restructuring and close two plants in Japan.
Nippon Sheet Glass now expects a loss of ¥3 billion for the year ending March 31, compared with a previous forecast of ¥14 billion in profit, it said in a statement Thursday. The company said the job cuts will cost about ¥25 billion, with an expected benefit of ¥20 billion annually after reforms take effect.
NEC, forecasting its third annual loss in four years, said Jan. 26 it will cut 7,000 jobs in Japan and 3,000 abroad amid slumping demand for its handsets and wireless gear.
The cuts come to about 8.6 percent of the firm’s workforce.
“No Japanese manufacturing company can make profit at the yen’s current level around 75 to the dollar,” said Toshihiro Nagahama, chief economist at Dai-ichi Life Insurance Research Institute. “This is the biggest catastrophe for Japanese manufacturers since the war.”
Unemployment rose to 4.6 percent in December, compared with the five-year average of 4.4 percent, as job losses were offset by an increase in the number of people leaving the workforce having reached retirement age.
The job cuts announced this earnings season included the heads of both Sony, which lost about ¥480 billion on TVs in the past seven years, and Canon Inc., the world’s biggest camera maker.
Canon President Tsuneji Uchida will leave his post effective March 29, while Sony Chief Executive Officer Howard Stringer will be replaced by Kazuo Hirai on April 1.
Sony more than doubled its annual loss forecast Thursday to ¥220 billion, underscoring the challenge for Hirai in reviving Japan’s biggest consumer-electronics exporter.