Sanyo to lay off 14,400, aiming for profit by 2007

Sanyo will cut 14,400 jobs worldwide in the next three years as it restructures, the company said Tuesday.

Sanyo Electric will make deep reductions in both its work force and factory space over the next three years, according to a mid-term plan released by the company's new management team Tuesday.

Sanyo plans to cut its worldwide work force of 96,000 by 15 percent, or 14,400 people, over the next three years. Over the same period it will sell 20 percent of the 2 million square meters of land its factories occupy in Japan. It also plans several other measures designed to help it generate profit margins of 5 percent in its 2007 fiscal year, the company said.

Putting the plan in place will be the job of Tomoyo Nonaka, Sanyo's recently appointed chairwoman and chief executive officer (CEO). After serving as an outside director for the company for three years, Nonaka's appointment to the top job earlier this year drew interest in Japan. This was partly because she is a female CEO in a country where such a thing is still rare, and also because she is best known to many Japanese from her previous career as a TV news anchor.

The management shake-up that put Nonaka in charge followed several years of poor performance at Sanyo. In the year to March 2005 it reported net sales of YEN 2.5 trillion (AUD$30 billion as of March 31, the last day of the period reported), down 1 percent from the year before, and a net loss of YEN 137 billion. For the current year it forecasts no growth in sales and a narrower net loss of YEN 92 billion.

Sanyo's mid-term plan charts a new direction for the company. In recent years, Japanese companies have become keen on adopting grand corporate visions that are often based on the philosophy that a company should exist in harmony with its environment. In this respect, Sanyo's new vision doesn't disappoint.

"Sanyo's mission is to 'restore a beautiful Earth to the children of the future' and using 'Sustainability' (Symbiotic Evolution) as a keyword, Sanyo will aim to 'become a company that pleases life and the Earth', and 'Think Gaia' will be the new vision guiding Sanyo," the company said in a statement.

What this means precisely for the company and its products has yet to be spelled out, but in broad terms it means that Sanyo will put more emphasis on environmental technologies and systems, said Ryan Watson, a spokesman for Sanyo in Tokyo.

Sanyo is already involved in the development of several technologies related to environmental issues, including solar cells, rechargeable batteries, systems for hybrid electric vehicles and recycling systems, Watson said.

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