As part of a massive reorganization plan, the Japanese electronics firm Panasonic Holdings plans to lay off 10,000 employees worldwide, or about 4% of its 230,000-person workforce. According to the company, the layoffs will be distributed equally, with 5,000 jobs being cut in Japan and an additional 5,000 in foreign businesses. The majority of this change is expected to take place during the current fiscal year, which ends in March 2026.
The job cuts are part of Panasonic’s broader effort to overhaul its management structure and boost profitability in the face of a shifting global market and ongoing challenges in its traditional business lines. As it makes these adjustments, the corporation expects to spend around $900 million, or 130 billion yen, on restructuring. In an effort to streamline operations and lower fixed costs throughout the business, Panasonic’s leadership has said that the cuts will concentrate on sales and administrative positions inside its consolidated subsidiaries.
Restructuring to Address Profit Decline and Market Shifts:
The news is made as Panasonic struggles with declining earnings and a rapidly evolving technology environment. The business, which was once a leader in consumer electronics, is now up against fierce competition from rivals around the world, particularly from China. Although Panasonic has expanded into industries including energy, housing, and automobiles over the last 20 years, profitability has continued to be a challenge.
In the fiscal year ending March 2025, Panasonic reported a 17.5% drop in net profit, falling to 366 billion yen, with net sales down 0.5% to 8.46 trillion yen. The company’s consumer electronics division, once its flagship, has seen reduced demand, prompting Panasonic to consider exiting or scaling back operations in underperforming segments like industrial devices and television manufacturing. The company’s CEO, Yuki Kusumi, acknowledged the difficulty of the decision, noting the need to fundamentally overhaul the fixed-cost structure to remain competitive.
Panasonic’s restructuring plan includes not only workforce reductions but also the consolidation of sales divisions and back-office functions. The company will reevaluate the number of organizations and personnel needed, promoting the closure or integration of loss-making businesses and sites. Early retirement offers are expected to be part of the process, particularly in Japan.
Energy Division Shows Strength Amid Broader Challenges:
Even with the difficulties in its heritage sectors, Panasonic’s energy segment is a shining example. For this unit, the company expects operating earnings to rise by 39% to 167 billion yen in the fiscal year that ends in March 2026. Panasonic is a significant supplier to automakers like Tesla, and this expansion is being driven by the growing demand for energy storage systems and batteries for electric vehicles.
In the most recent fiscal year, the energy division generated 120.2 billion yen, slightly below its target but still a significant contributor to the company’s overall performance. Panasonic remains bullish on the prospects for EV batteries, planning to expand partnerships with Japanese automakers such as Mazda and Subaru. The company’s focus on innovation in battery technology is seen as a key driver for future growth, even as it undertakes tough measures elsewhere in the business.
Long-Term Goals and Industry Outlook:
Panasonic aims to improve its profit by at least 150 billion yen by March 2027, and by 300 billion yen by March 2029, through ongoing management reforms and the discontinuation of unprofitable operations. The company is targeting a return on equity of at least 10% by the end of the decade, a goal that will require continued discipline in cost management and a focus on high-growth sectors.
Panasonic’s restructuring comes as the global electronics industry faces headwinds from slowing demand, especially in the electric vehicle market, and uncertainty around international trade policies. While the company did not cite specific impacts from U.S. tariffs, it acknowledged that it is closely monitoring the situation and will take steps to minimize any negative effects.
The decision to cut 10,000 jobs marks a significant moment in Panasonic’s long history, reflecting both the challenges of adapting to a new era and the company’s determination to secure its future. As the restructuring unfolds, Panasonic will be watched closely by investors, employees, and industry observers alike, as it seeks to balance cost-cutting with investment in innovation and growth.
