Troubled Sharp opens $350 million voluntary redundancy initiative

These are tough times at Sharp and the company is out to retain every yen that it can. Now the financially troubled Japanese firm has revealed it has set aside close to $350 million (27 billion yen) to offer its staff voluntary redundancy packages.

Earlier this month the company announced plans to lay off 5,000 employees and it is reportedly seeking to raise $1.2 billion through the sale of key assets, as it rallies to cover the cost of a number of upcoming refinancing initiatives.

The voluntary redundancy offer was announced at a board meeting held today and has been communicated to the company’s labor union. Those wishing to clock out early, must apply between November 1-14. The company estimates that 2,000 employees will be given the redundancy terms, which will see them retire December 15, although it concedes that the figure isn’t final.

The company has already factored the associated expenses into its financial forecast for the current fiscal year, which ends March 31 2013.

Sharp is waiting to close a key financing deal with Hon Hai, the Taiwanese parent company of noted Apple supplier Foxconn. A series of issues have held the investment up, mostly due to drop in Sharp’s share price following the announcement of its planned job losses.

Hon Hai chairman Terry Gou indicated to Reuters yesterday that the arrangement, which will see Hon Hai take a 9.9 percent stake in the company, will go through as previously agreed. That’s despite plenty of speculation and the Taiwanese government itself labelling the deal “a bit pricey”, as part of a mandatory check into the agreement.

Despite its woes and struggle to compete in the chip making market, Sharp is a key supplier of Apple’s devices. With the next iPhone tipped to be unveiled in September, the investment is seen as strengthening Sharp and helping to ensure that Apple’s iPhone supply chain remains robust in the face of what’s likely to be intense demand for the device.

Image Flickr / Steve Snodgrass