Sharp posts first loss in five decades, announces job cuts

Japanese electronics company Sharp warned last Friday that it will be posting a 100 billion yen ($1.1 billion) loss for the current fiscal year, and also announced that there would be 1,500 contract worker job cuts in Japan before the end of March.

Sharp hasn't had a net loss since 1950 and had previously forecast a 60 billion yen profit for the current fiscal year through March.

According to the Associated Press, the company's net loss for the usually strong October-December quarter was 65.83 billion yen, a sharp decline from a 29.60 billion yen profit for the same period last year. The audiovisual and communications division, which makes Sharp's Aquos line of LCD TVs and accounts for nearly half of the company's revenues, recorded a 22.35 billion yen loss for the quarter.

While Sharp still expects to sell 10 million LCD TVs for the full fiscal year, 21 percent more than last year, the company also forecasts that LCD TV revenues will drop 10 percent, due to lower margins from LCD TVs sold.

Although the job cuts will not effect the company's full-time global work force, the announcement adds Sharp to an ever-growing list of technology companies who have cut jobs recently. Last month NEC announced 20,000 job cuts, in addition to 16,000 at Sony, 15,000 jobs at Panasonic, 7,000 at Hitachi and even the loss of 5,000 jobs at Microsoft.

Sharp plans to slash expenses over the next two years, including salary cuts for executives and managers, as well as the reorganisation of its LCD factories.

According to Reuters, the company is currently building a new cost-efficient display panel plant in Western Japan, which is due to start manufacturing in March 2010. It will be the World's first factory to use so-called 10th-generation glass substrates, which can yield more panels than previous generations and can help Sharp offer better priced LCD TVs.

Executive Vice President of Sharp, Toshishige Hamano, told a news conference in Osaka, "That is going to be an overwhelmingly cost-competitive plant. It is crucial for us to start up the plant as quickly as possible to improve our cost structure."