Panasonic considers headcount savings, asset sales in revival plan

LAS VEGAS (REUTERS) - Japan's Panasonic may see its headcount fall further and may sell non-core money-making business units to raise cash, its president Kazuhiro Tsuga told reporters at the CES consumer electronics show in Las Vegas on Tuesday.

Hammered by competition from South Korean rivals such as Samsung Electronics, Panasonic may also squeeze wages and seek joint ventures in its semiconductors and other struggling operations in a bid to rekindle profit growth, Mr Tsuga said.

Shares in Panasonic slipped 1.4 per cent to a two-week low in Tokyo morning trade, compared to a 0.4 per cent increase on the benchmark Nikkei average.

The Panasonic chief said in an earlier keynote speech he would pursue strategies to expand business-to-business sales of car batteries, in-flight entertainment systems, hydrogen cells, solar panels and LED lighting.

Japan's share of the world's flat-panel TV market this year likely contracted to 31 per cent compared with 41 per cent in 2010, according to the Japan Electronics and Information Technology Industries Association.

Panasonic earlier unveiled a prototype of the world's largest organic light-emitting display screen in a show of technological one-upmanship with its South Korean rivals Samsung and LG Electronics.

Sony, which is cooperating with Panasonic in Oled technology, unwrapped on Monday its own 56-inch ultra high-definition model.

Mr Tsuga, who heads Japan's biggest commercial employer with 300,000 staff, is also pursuing a niche strategy and bolstering the company's appliance business in a bid to capture more profitable markets, while the likes of Samsung and Apple slug it out in mass-market consumer electronics.

He has promised to deliver the details of the revival plan by the end of March, when he plans to reorganise 88 businesses into 56 units.

So far, he has said that businesses that fail to achieve a 5 per cent operating margin within two years will be shuttered or sold. Sales of the weakest ones may start next business year.

Panasonic in the year to March 31 is forecasting a net loss of US$8.9 billion (S$10.9 billion).

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