Panasonic Holdings Corp. has announced plans to cut 10,000 jobs worldwide, which accounts for about 4% of its global workforce. The layoffs will affect both its Japanese and international operations, with 5,000 positions being eliminated in each region. This decision is part of a broader restructuring strategy designed to improve operational efficiency and long-term profitability.

The company expects to incur restructuring costs of approximately ¥130 billion (around US$896 million) during the current fiscal year, primarily affecting its Lifestyle business, which includes home electronics, heating, and ventilation systems. However, Panasonic’s energy division, which focuses on electric vehicle batteries and energy storage systems, is expected to see a 39% increase in operating profit, driven by strong demand in these sectors.

Panasonic’s leadership, including President Yuki Kusumi, acknowledged the painful nature of the decision. Kusumi expressed regret over the layoffs, emphasizing the necessity of these changes to ensure sustainable growth in the future. “Unless we fundamentally reform the foundation of our business now, we will not be able to ensure sustainable growth 10 or 20 years from now,” he stated.

As part of its restructuring efforts, Panasonic is also selling its car-equipment business to Apollo Global Management, retaining a 20% stake. The company is aiming for a return on equity of 10% by fiscal year 2029, with a target of achieving ¥600 billion in adjusted operating profit by the fiscal year 2027.

These strategic adjustments reflect Panasonic’s commitment to streamlining operations and refocusing on high-growth areas, such as data center power solutions, energy storage, and aviation electronics.