On Friday, May 9th, Panasonic Holdings announced alongside its latest financial report that it will be laying off 10,000 employees and initiating a large-scale restructuring to enhance its overall profitability. Following the announcement, the company’s stock price rose by 2.2% in overseas markets.
The Japanese electronics giant reported earnings per share of approximately 23 cents for the latest quarter, with revenue reaching $14.2 billion, both exceeding market expectations of 12 cents and $13 billion, respectively.
The core objective of this restructuring plan is to increase the profit margin to 10%. As part of this strategy, one of the primary measures will be staff reduction, expected to be completed within the current fiscal year, with half of the positions coming from Japan and the other half from overseas. Panasonic currently employs over 200,000 workers globally and operates in various sectors including home appliances, motors, televisions, and electric vehicle batteries.
The company stated that the staff reduction will be carried out through consolidating sales and logistics departments, closing certain operational sites, discontinuing loss-making businesses, and implementing early retirement in Japan. In line with the restructuring blueprint proposed in February, Panasonic will also conduct a comprehensive review of the sales and logistical operations of its subsidiaries.
Regarding the restructuring costs, approximately half will be attributed to the Lifestyle business responsible for home appliances and air conditioning equipment, while roughly 40% will come from the “Other Segments,” including the holding company, excluding the energy business serving major customers like Tesla, which will not be included in the restructuring costs.
Panasonic indicated that all businesses, including electric vehicle batteries, are expected to continue growing in 2025. This forecast also mirrors the sustained strong demand for electric vehicles globally over the next 12 months.
Looking ahead, Panasonic forecasts revenue for the 2026 fiscal year to reach $54 billion, surpassing the $53.5 billion for the 2025 fiscal year (excluding the automotive business sold off at the end of last year). Wall Street currently anticipates revenue of $53.5 billion for the 2026 fiscal year.
In terms of operating profit, Panasonic estimates it will reach $3.4 billion, accounting for 6.4% of revenue, higher than Wall Street’s expectation of $3 billion.
It is worth noting that this financial forecast does not include any potential tariff variables. Panasonic’s annual sales in the United States amount to approximately $11 billion.
As of now, Panasonic’s stock has risen approximately 6% year-to-date, with a 27% increase over the past 12 months. In comparison, the S&P 500 and Dow Jones Industrial Average futures have experienced slight increases of 0.3% and 0.1%, respectively, over the same period.
(Reference: Reuters, Barron’s)