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Friday, December 09, 2005
 Panasonic Revamps Cellphone Business
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Message Text: Japan's Matsushita Electric Industrial, maker of the Panasonic brand, announced up to 1,400 layoffs with the Philippines bearing the brunt of the cuts as it scales down its output of mobile handsets.

The group said it planned to stop making GSM cellphones and concentrate on new third-generation (3G) handsets.

Amid fierce competition in the mobile market, Matsushita aims to cut costs by unifying its platforms and core technologies for Japan and overseas.

"We've operated GSM manufacturing since 1992, but the situation has become severe due to increasing competition and declining prices," group president Yoshiaki Kushiki told reporters.

"We have to focus on the domestic operation, which is the development of products with more advanced features, and this has led us to downsize the overseas operations."

More than half of the job cuts will be made in the Philippines with the closure of a Panasonic factory employing 842 people producing GSM handsets in the Province of Laguna south of Manila.

Production at a site in the Czech Republic at Pardubice-Stare which has 210 workers will also be axed.

The electronics giant will also focus on a Linux operating system-based global platform, resulting in the closure of research and development operations in Georgia, the United States as well as in Berkshire, Britain.

A further site in Beijing will switch from GSM handset production to 3G.

All together up to about 1,400 jobs will be lost though the exact number has not yet been decided, Kushiki said.

The group estimates the cost of the restructuring to be about 10 billion yen (83 million dollars) and expects benefits of about seven billion yen.

Japan's electronic goods giants, including other leading names such as Sony and Pioneer, are struggling in the face of a fierce price war in markets such as mobile telephones, televisions and DVD recorders.

Earlier restructuring measures helped Matsushita grow its net profit by a third in the three months to September to 30.96 billion yen (271.5 million dollars). Sales were flat at 2.21 trillion yen.

Matsushita expects a full year net profit of 110 billion yen.
 
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