Hon Hai to 'seek understanding' on Sharp's restructuring

Sharp's largest shareholder says it will discuss "response measures" regarding Sharp's plans to cut 5,000 jobs due to growing losses.
Written by Jamie Yap, Contributor

Taiwanese electronics manufacturer Hon Hai, the largest shareholder of Sharp, intends to find out more about the Japanese company's plans to cut 5,000 jobs amid growing losses.

The Central News Agency in Taiwan on Thursday cited Hon Hai spokesperson Simon Hsing saying that company chairman Terry Gou and other business executives will "seek an understanding of the actual situation with Sharp's management and discuss response measures".

"We will not comment on any of Sharp's review plans until we come up with substantial results through negotiations," Hsing added in the report.

Hon Hai, known also by its trading name Foxconn, became the largest shareholder of Sharp with 10 percent ownership, after buying 66.5 billion yen (US$800 million) worth of new shares from the ailing Japanese electronics giant in March this year.

Sharp on Thursday announced plans to cut 5,000 jobs as its quarterly net loss ended Jun. 30 increased to 138.4 billion yen (US$1.76 billion) from 49.3 billion yen (US$629 million) a year ago. It also widened its annual loss forecast to 250 billion yen (US$3.2 billion) through to March 2013.

"We want to recover earnings by undertaking unprecedented restructuring measures swiftly," Tetsuo Onishi, managing director in charge of accounting, said in the report.

Sharp's decision to cut jobs followed similar initiatives by other Japanese electronics giants Panasonic and Sony, which also faced dwindling sales. The cost-cutting measures helped Panasonic get back in the black with a quarterly net profit of 12.8 billion yen (US$16.3 million) ended June.

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