Japanese firm to slash 30% of its workforce

10/08/2017 05:57 AST

Japan Display Inc posted a wider-than-expected loss and said it would slash 30 percent of its workforce, as it struggles with slow iPhones-related demand from Apple Inc and its late entry into organic light-emitting diode (OLED) screens.

Liquid crystal display screens have been Japan Display’s mainstay, with more than half its sales coming from LCD demand for iPhones. But it has been caught out by a swift change in consumption trends with handset makers shifting to the thinner and flexible OLED displays for high-end models.

Apple is widely expected to begin adopting OLED for its iPhones later this year. Japan Display, which is overhauling its ailing smartphone screen-making business, plans to start mass-producing OLED panels for smartphones in 2019 to catch up with Korean rivals like Samsung.

“We now see no future for the smartphone panel business without OLED,” CEO Nobuhiro Higashiiriki said at a briefing on Wednesday, after the company reported first-quarter results.

In the red over the past three years, Japan Display posted a net loss of 31.46 billion yen ($286.13 million) in the quarter ended June, versus a 11.8 billion yen loss a year ago. This was worse than an average forecast for an 18.1 billion yen loss from four analysts polled by Thomson Reuters.

The company did not give a full-year outlook, but said it expects to post a special loss of 170 billion yen due to the business overhaul in the year ending March 2018.

Higashiiriki said the firm may seek a capital injection from outside investors to help finance the overhaul. It got 75 billion yen in aid last year from its main investor - the state-backed Innovation Network Corp of Japan (INCJ).

Analysts see Chinese display makers as likely investors. But there are doubts if INCJ would allow Chinese players to have a stake in the firm, said Masayuki Otani, chief market analyst at Securities Japan.

Japan Display, which slashed 2,600 jobs late last year, said it would cut another 3,700 jobs as it plans to consolidate production lines at home and overseas.

The Gulf Today