More Retrenchment as Panasonic Tries to Stem the Losses
Panasonic, like several other Japanese electronics firms (including our blog favourite Sony), appears to be in deep trouble. I hadn't quite appreciated the scale of the problems facing Panasonic until I came across this report on Reuters which describes how Panasonic plans to cut a further 10,000 jobs from its workforce, on top of the 36,000 jobs that it shed last through through business sales and closures.
By any measure that is a significant programme of retrenchment, although to put the number into some perspective, Panasonic still employs around 300,000 people.
Panasonic is a conglomerate with business interests in many consumer and industrial markets. However, it looks like its product portfolio is about to be further trimmed. The article describes a potential "garage sale'-style series of business disposals and closures as Panasonic aims to raise cash from non-core assets, extract itself from loss-making activities and focus on the remaining core markets.
One startling statistic from the article is packed with business studies value:
The future doesn't look too bright for those business units that are not achieving the required rate of return.
Around 20% of Panasonic's 88 business units are losing money and only half so far meet a target for at least 5 percent operating margin
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