Panasonic to downsize mobile unit: report

Summary:The tech firm is considering a withdrawal from the European market within six months, according to reports.

Electronics firm Panasonic is debating the shrink of its mobile phone unit, according to Reuters.

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Unnamed sources told the publication that Panasonic may be withdrawing from the European market within six months, which could result in a writedown on the mobile phone unit by the end of the fiscal year.

Cost-cutting and company restructuring is a key priority for new chief executive Kazuhiro Tsuga, who has vowed to scrap elements of the business that are not producing profit or are bringing down the balance sheet.

A restructuring plan will be announced by the end of March.

According to analyst estimates, writing off part or all of the firm's $873 million spend on the mobile phone business would add 41 billion yen ($512 million) to restructuring costs.

The Japanese firm stopped selling mobile phones abroad in 2005. However, Panasonic returned to Europe to try and sell 1.5 million smartphones this fiscal year, as part of a plan to increase global handset sales to 15 million by March 2013. It seems that this has not gone to plan, and so the new CEO may be forced to consider the mobile phone unit as an unprofitable branch of the business -- destined for pruning.

Panasonic will be releasing its next quarterly results on Wednesday.

Topics: Mobility

About

Charlie Osborne, a medical anthropologist who studied at the University of Kent, UK, is a journalist, freelance photographer and former teacher. She has spent years travelling and working across Europe and the Middle East as a teacher, and has been involved in the running of businesses ranging from media and events to B2B sales. Charli... Full Bio

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