The founder of Foxconn, which has a 66 per cent stake in Sharp, said in an open letter to employees that the Japanese electronics maker will need to reduce its workforce, following an annual loss of JPY 162 billion ($1.5 billion), Reuters reported.
“Unfortunately, a close review of the company’s operations makes it clear that the level of inefficiency throughout Sharp means that a turnaround … can only take place if there is a reduction in costs, and that comes with a very regrettable need to reduce Sharp’s workforce,” Terry Gou wrote.
He added that layoffs would be carried out “responsibly and sensitively” and promised salaries would go up and “profit-sharing would again be the norm,” the report said.
While the letter did not specify how many jobs would be lost, Reuters quoted a source as saying the figure could be around 3,000 in Japan, with the number expected to be higher if overseas offices were included.
Sharp’s loss can partly be attributed to slower sales of the iPhone, with Apple being one of its major customers.
Foxconn confirmed the letter was sent from Gou and Tai Jeng-wu, Foxconn’s vice chairman who will be taking over as CEO.
Tai is a 30-year veteran of Foxconn, and a close aide to the company’s founder Terry Gou, who also assisted in Foxconn’s negotiations with Sharp.