Panasonic CEO Yuki Kusumi to take 40% pay cut following 10,000 layoffs
Panasonic, the Japanese electronics giant and original battery supplier to Tesla, has announced a major restructuring initiative, which includes laying off 10,000 workers globally. This decision comes amid significant financial challenges, including a decline in profits and heightened competition in the electric vehicle (EV) sector. In a striking show of leadership, CEO Yuki Kusumi has agreed to reduce his compensation by 40%, taking responsibility for the company's current difficulties.
The layoffs, which will be carried out by March 2026, will impact approximately 5% of Panasonic's workforce, with 5,000 jobs cut in Japan and 5,000 internationally. This move is part of the company’s broader effort to streamline operations, particularly within its sales departments, to improve overall operational efficiency. The restructuring comes in response to the company’s financial struggles, as it seeks to adapt to a rapidly changing market.
During an online press conference, Kusumi expressed his regret over the layoffs, saying, “Responsibility for management lies with me, and I feel very ashamed.” His decision to take a 40% pay cut further demonstrates his commitment to leading by example and sharing the burden of the company’s financial troubles.
In its latest financial report released in March, Panasonic revealed that its net profit had decreased by 17.5%, with sales down by 0.5%. The forecast for the 2025 fiscal year is even more concerning, with the company projecting a further 15.3% drop in profits and a 7.8% decline in sales. As part of its efforts to recover, Panasonic has set an ambitious target to increase its profits by ¥150 billion (approximately US$1 billion).
While the company did not directly address the impact of U.S. tariffs, increased competition from Chinese battery manufacturers such as BYD and CATL was cited as a major contributing factor to its financial woes. These companies have started to erode Panasonic’s market share, particularly in the electric vehicle battery market, as they produce batteries for key players like Tesla.
Additionally, the slowdown in global EV demand has added to the company’s challenges. Despite this, Panasonic has secured strategic partnerships with Mazda and Subaru in 2024, which it hopes will bolster its position in the EV market moving forward.
In a bid to strengthen its EV battery business, Panasonic opened a newly renovated plant in Wakayama, just outside Osaka, in September 2023. This plant is dedicated to the mass production of high-capacity 4680 battery cells, which are designed to improve EV driving range while reducing overall production costs. Previously, production bottlenecks had hindered the release of the Tesla Cybertruck, but Panasonic’s efforts to streamline 4680 production aim to rectify this issue.
The Wakayama plant, along with Panasonic’s two U.S.-based facilities in Nevada and Kansas, is part of the company’s long-term strategy to support the global EV industry. Panasonic has also committed to achieving zero emissions in its operations, underscoring its focus on sustainable manufacturing practices.
As the company works to navigate through these difficult times, the announcement of the layoffs and the CEO’s voluntary pay cut represent bold steps towards restoring financial health and operational efficiency. Kusumi’s actions reflect a deep commitment to turning around the company’s fortunes amidst fierce competition and shifting market dynamics. Whether these measures will be enough to secure Panasonic’s future remains uncertain, but the company is clearly making significant efforts to adapt to an evolving global marketplace.