In a bid to streamline its operations and enhance efficiency, Panasonic has announced a significant reduction in its workforce by 10,000 employees globally. This measure, revealed on Friday, will see job cuts split evenly between Japan and international locations. The Osaka-headquartered electronics giant, known for its range of home appliances including washing machines and refrigerators, aims to transform into a more agile and “lean” organization.
The reduction, accounting for approximately 4% of Panasonic’s total workforce of 230,000, will involve early retirement incentives within Japan and the restructuring of certain business units worldwide. Beyond household electronics, Panasonic is involved in diverse sectors, producing solar panels, robotic delivery systems, facial recognition technologies, residential fuel cells, and electric vehicle batteries, notably for Tesla.
On the financial front, Panasonic disclosed a 17.5% decline in profits for the fiscal year ending in March, recording 366 billion yen ($2.5 billion), down from the 443 billion yen reported the preceding year. The company’s annual sales dipped to 8.46 trillion yen ($58 billion), representing a 0.5% decrease compared to the previous year. The company attributed its financial setbacks to a slowing global economy and reduced demand for electric vehicles, although domestic sales of air-conditioners and consumer electronics maintained their strength.
Addressing the announcement, Panasonic’s Chief Executive, Yuki Kusumi, expressed a somber sentiment regarding the workforce reduction. The company refrained from attributing its profit decline to the trade policies executed by U.S. President Donald Trump. Moving forward, Panasonic projects its profits will grow considerably by the fiscal year ending in March 2027, forecasting an improvement by 150 billion yen ($1 billion), with an additional uplift of 300 billion yen ($2.1 billion) anticipated by March 2029.
This growth is expected to stem from strategic management reforms, the discontinuation of underperforming ventures, and the establishment of a more adaptable business framework that can swiftly react to market shifts. However, executives cautioned that while these changes hold promise for the future, the upcoming fiscal year is poised for further profit decreases. Specifically, for the fiscal year concluding in March 2026, Panasonic is projecting a profit of 310 billion yen ($2.1 billion) against sales amounting to 7.8 trillion yen ($54 billion).
Despite these challenges, Panasonic remains optimistic about its prospects in the electric vehicle battery sector, with plans to forge new strategic alliances with Japanese automakers, Mazda Motor Corp. and Subaru Corp., to bolster its market presence in this domain.