August 28, 2012 / 8:33 AM / in 5 years

Embattled TV maker Sharp to cut 2,000 jobs in Japan

TOKYO (Reuters) - Struggling Japanese TV maker Sharp Corp (6753.T) would offer severance packages to as many as 2,000 workers in Japan as part of a plan to lay off one-tenth of its global workforce in a bid to reduce costs.

Sharp Corp's Yaita factory, where it assembles Aquos televisions and solar panels, is seen through a barbed wire fence in Yaita, north of Tokyo August 17, 2012. REUTERS/Reiji Murai

The redundancy incentive will be available from November 1 for two weeks and is expected to cost 27 billion yen ($343.23 million), or around 13.5 million yen per person, the company said in a release on Tuesday.

Sharp, which wants to trim its workforce by 5,000 people, is resorting to its first layoffs in more than 60 years as it struggles to overcome losses that have drained it of cash and left it relying on its main banks Mizuho Financial Group (8411.T) and Mitsubishi UFJ Financial Group (8306.T) for funding.

When cutting staff in Japan, companies often target workers who are 55, who are five years away from retirement, because severance packages are usually limited to a year’s salary. For employees in their forties, the cost can rise to as much as three times what they earn in a year.

In addition to the 2,000 redundancies in Japan, 1,300 workers will be removed from Sharp’s payroll after it sold most of its TV panel factory in Sakai, western Japan, to Taiwanese partner Hon Hai Precision Industries (2317.TW) and other investors.

A further 1,100 jobs will be cut overseas by March 31, with the remainder lost through natural attrition, the company said. ($1 = 78.6650 Japanese yen)

Reporting by Tim Kelly; Editing by Michael Watson and Ryan Woo

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