TOKYO (majirox news) — Japan’s electronics industry continues to face problems. Sharp Corporation, one of the world’s most famous brands of flat-screen TVs, has announced job cuts totaling 5,000 worldwide.
This, the first cuts in the workforce for more than 60 years, would amount to nearly 10 percent of the total number of workers. The net loss for the second quarter of this year is nearly 1.8 billion dollars, about three times that for the same period the previous year. Sharp blames the loss on sluggish demand from the home and Chinese markets for its liquid crystal TV sets.
“Sharp’s actions will have a significant impact on Japan’s economy and culture,” said Megumi Kaneko, an economic consultant. “It is because of the size of the layoffs. Previously workers who graduated from school became employed, and would continue working at the same company until they reached retirement age. In other words, workers would be set up for life.”
Drastic problems call for drastic measures, and Sharp will use an early retirement plan to cut numbers from the 57,000 global workforce – an unusual step for a Japanese manufacturer.
“Japan needs to take more measures,” Kaneko said. “Although Japan is good at manufacturing and services, it will need to develop novel high-tech products in order to maintain its manufacturing base. However, not all Japanese companies are in the red. Most of those in the red are export companies. They are suffering from the high-yen. There are also other concerns including deflation and electricity supply. I blame these problems on the politicians.”
Sharp executives will share the pain. Originally slated to take pay cuts of between 10 and 30 percent, their salaries will be slashed by 20 to 50 percent.
Ken Hattori, who works in the restaurant industry in Tokyo, said, “I just worry about what’s going on in the Japanese economy, especially in the future. But I don’t really know what our government is doing right now, so I am really disappointed.”
Combined with disappointing results from other name brand Japanese makers, the news from Sharp is not good. The fabled Japanese system of “lifetime employment” seems to have reached the end of the road, as one by one, Japanese employers are implementing previously unthinkable methods to rescue their ailing companies.
Sharp is not unique in laying off workers – other major makers are also suffering. With all the bad news, one may be forgiven for renaming Japan as the “Land of the Setting Sun” instead of “Land of the Rising Sun,” at least at present.