Amidst a highly aggressive business environment, Panasonic has been starting a sequence of actions to refresh and grow its electronics business. As part of its mid-term ideal projects declared in Apr 2012, Panasonic determined source marketing as one of the key projects for changing its electronics business and Panasonic has since been gradually applying various architectural change actions to boost costs, improve its overall organization, speed up decision-making procedures and identify firm fundamentals for maintainable future growth. In its prior business strategy statement, Panasonic stated that through the mixture of these architectural change actions and business profile renegotiation it predicted to decrease headcount across the entire Panasonic Group, mainly in the electronics business, by roughly 10,000 in the economical year finishing Goal 31, 2013 ("FY12"), such as roughly 3,000 to 4,000 in Japan.
Among the actions performed to date are incorporation and relief of revenue workplaces and source marketing in marketing and advertising companies, mainly in Japan, the U.S. and European countries. Within Sony's head office and assistance operations, certain functions have been incorporated and business components have been structured, while the Company has performed a thorough review of perform content and work-flow process to ensure greater functional performance across these operations. Furthermore, on September 1, 2012, Panasonic established Panasonic Corporate Services (Japan) Corp., which is working to build a horizontally foundation that features assistance operations from across Sony's combined subsidiaries in Japan.
As the proportion of Sony's finished products being produced at its overseas manufacturing sites and by external ODM/OEM vendors continues to increase, Sony has also been taking measures, such as site consolidation, to better reflect the current scale of production, as well as steps to further enhance operational efficiency.
The new restructuring measures announced today, relating to Sony's headquarters and electronics business operations in Japan are as follows.
Consolidation of Manufacturing Sites
In order to enhance the efficiency of Sony's manufacturing operations relating to its digital imaging business, the manufacture of interchangeable lenses and lens blocks currently being conducted at Sony EMCS Corp.'s Minokamo Site (located in Minokamo, Gifu Prefecture) will be absorbed by EMCS Corp.'s Kohda Site (located in Kohda, Aichi Prefecture). As Sony concentrates its mobile phone business on the area of smartphones, the operations currently being carried out at the Minokamo Site relating to mobile phones will be partially discontinued and partially transferred to Sony EMCS Corp.'s Kisarazu Site. As a result of this realignment, the Minokamo Site is scheduled to close at the end of March 2013.
[Overview of Minokamo Site]
Company Name: Minokamo Site, Sony EMCS Corp.
Address: 9-15-22 Hongo, Minokamo, Gifu, Japan 505-8510
Site Area: 56,713m2 / Total Floor Area: 49,913m2
Number of employees: 840 (direct employment)
Principle Operations: Manufacture of interchangeable lenses for digital SLR cameras, lens blocks and mobile phones. Customer service operations for mobile phone business in Japan
Headcount reduction resulting from optimization of organizational structure and realignment of business portfolio
In order to optimize personnel structure and assist employees to secure new opportunities outside the Company, early retirement programs will be implemented at Sony Corporation, Sony EMCS Corp. and other major consolidated electronics subsidiaries in Japan. These measures are expected to result in headcount reduction of approximately 2,000 employees by the end of FY12, with approximately half of the reductions (1,000 employees) expected to be in support functions, including the headquarters of Sony.
In particular, at Sony's headquarters operations where organizational integration and optimization have been actively implemented, a headcount reduction of approximately 20% is expected by the end of the current fiscal year through the introduction of an early retirement program and resource shifts. Headcount within the Home Entertainment and Sound Business Group, including the TV business group which has been implementing a series of ongoing profitability improvement measures, is expected to be reduced by approximately 20% by the end of October 2012 due to the transfer of employees outside the Company, together with a resource shift in personnel to other operations within the Sony Group.
Following the sale of the chemical products businesses completed in late September 2012, approximately 1,800 employees have been transferred outside the Sony Group (as previously announced).
Sony is evaluating the actual impact of headcount reduction and the restructuring charges resulting from these measures on Sony's FY12 consolidated results; however, no material impact is anticipated on Sony's FY12 consolidated results forecast, as these measures are included in the 10,000 headcount reduction and 75 billion yen in restructuring charges Sony previously announced for FY12. Furthermore, as a result of the restructuring measures implemented during FY12, including those announced today, Sony anticipates an annual reduction in fixed costs of approximately 30 billion yen from the fiscal year ending March 31, 2014 onwards.
Source : The Next Web