Key Points
- Panasonic will lay off 10,000 employees worldwide-about 4% of its workforce-split evenly between Japan and overseas.
- The job cuts are part of a sweeping management reform to address declining profits and sales, and will mainly affect sales and indirect departments.
- The company reported a 17.5% drop in net profit for fiscal 2025 and projects further declines in profit and sales for 2026.
- Panasonic aims to improve profitability by at least 150 billion yen ($1 billion) through restructuring, consolidation, and exiting unprofitable businesses.
- CEO Yuki Kusumi has acknowledged the need for drastic changes to remain competitive and will take a pay cut as part of the reform effort.
Tokyo: Japanese electronics giant Panasonic, a key supplier of batteries to Tesla, has announced a major global restructuring that will see 10,000 jobs eliminated-about 4% of its total workforce. The decision comes as the company faces mounting pressure from falling profits, sluggish sales, and intensifying competition in the electronics and energy sectors.
Details of the Layoffs and Restructuring
The layoffs, which will be split evenly between Japan (5,000 jobs) and other countries (5,000 jobs), are scheduled to take place primarily in the fiscal year ending March 2026. Panasonic stated that the cuts will focus on sales and indirect departments, with a comprehensive review of operational efficiency and personnel needs across all group companies. The company also plans to merge sales divisions and back-office functions, and to exit or wind down loss-making businesses with no prospects for recovery.
Panasonic emphasized that all job reductions will comply with local labor laws and regulations in each country[5][7].
Financial Performance and Outlook
Panasonic’s restructuring comes on the heels of a disappointing fiscal year. For the year ended March 31, 2025, the company reported a 17.5% decline in net profit to 366.2 billion yen, with sales down 0.5% to 8.46 trillion yen. Looking ahead, Panasonic forecasts a further 15% drop in net profit and an 8% decline in sales for fiscal 2026, reflecting ongoing challenges in its core businesses and the impact of global economic headwinds.
To counter these declines, Panasonic is targeting at least a 150 billion yen ($1 billion) improvement in profit through its current management reform program, with a longer-term goal of boosting adjusted operating profit to 600 billion yen by fiscal 2027.
CEO’s Statement and Industry Context
In an online news conference, Panasonic Holdings CEO Yuki Kusumi acknowledged the urgent need to overhaul the company’s cost structure, noting that its selling, general, and administrative expenses remain higher than industry peers. Kusumi has pledged to take a 40% pay cut and expressed personal responsibility for the company’s performance, stating, “I feel very ashamed”.
The restructuring is also a response to shifting industry dynamics, including a slowdown in demand for electric vehicles (impacting Panasonic’s battery business), rising competition from Chinese manufacturers, and global trade uncertainties. Panasonic’s management reform program, first outlined in February, aims to streamline operations, focus on growth areas like data and energy storage, and build “global-standard cost capabilities” to restore profitability.
Broader Impact
Panasonic, founded in Osaka over a century ago, has long been a household name in consumer electronics and is a vital supplier to global brands such as Tesla. The company’s latest moves mark one of its largest layoffs since the early 2000s and signal a decisive shift in strategy as it seeks to adapt to a rapidly evolving technological landscape.
Timeline: Panasonic’s Restructuring and Financial Performance
| Fiscal Year | Net Profit | Net Sales | Workforce Reduction | Key Actions |
|---|---|---|---|---|
| 2025 | 366.2 bn yen ↓17.5% | 8.46 tn yen ↓0.5% | Announced | Management reform, review of all group companies |
| 2026 (proj.) | ↓15% (forecast) | ↓8% (forecast) | 10,000 jobs | Layoffs, consolidation, exit loss-making units |
| 2027 (goal) | +150 bn yen profit | 600 bn yen adj. op. profit | – | Streamlined operations, focus on growth sectors |
Panasonic’s sweeping layoffs and restructuring underscore the challenges facing legacy electronics giants in a fast-changing global market. The company’s leadership insists these tough decisions are crucial to restoring competitiveness and long-term growth.
