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In a latest development, Japan’s loss-making Sharp Corp has planned to cut 12% of its workforce in a global restructuring expected to cost more than $1.7 billion.
On an estimate, the job cuts will total around 6,000, half of which would come in Japan through early retirement while the rest would be overseas.
After facing consecutive losses, the LCD screen and consumer electronics manufacturer has been in talks with banks, seeking to secure its second major bailout since 2012 while working on a fresh plan to overhaul its business.
Experts said a debt-to-equity swap would be a logical option and that Sharp has also asked Japan Industrial Solutions, a corporate turnaround fund, to invest up to $250 million in capital.
The company, however, declined to comment on reports of restructuring plans, saying that it has not made any announcements.
No LCD overhaul
If the company goes ahead with job cuts than it would come on top of 5,000 people losing their jobs in Sharp’s previous round of restructuring that began three years ago when it was bailed out by banks with loans and credit lines worth 360 billion yen.
Several reports have also said new steps that the Japanese company may embark on include shedding its North American television business, lowering pay for workers in Japan, shutting a TV factory in Mexico and cutting the size of its North American sales division.
But Sharp, which supplies screens to Apple Inc and other smartphone makers, so far seems unwilling to bite the bullet on problems in its LCD panel business.
There has also been much speculation that Sharp’s LCD business, which accounts for the bulk of its profits, would be better off if was bought by rival Japan Display Inc which has staged a strong comeback to eat into Sharp’s sales of smartphone screens in China.The company has denied that it is considering such a move.