Cutting 10,000 jobs at home and abroad amid strong results: reforming the fixed-cost structure (2025)

Taking the pain early, while still in the black

The core of this decision is that, rather than reluctantly cutting staff after results collapse, Panasonic stepped into a cut on the order of ten thousand people in the midst of strong results, having secured twelve straight years in the black. What it carried was not a near-term deficit but a fixed-cost structure — selling, general and administrative expenses roughly five points heavier than its peers’ — and a long stagnation that had lacked real growth for thirty years. Kusumi Yuki grasped being in the black and being unable to grow as separate things, and chose to cut fixed costs while it still had the strength to do so. Not a slimming forced by being cornered, but a structural shift made while it still had stamina.

Restructuring amid strong results carries a price, of course. The cuts swelled from the initial ten thousand to twelve thousand, and in the year ending March 2026 restructuring costs such as severance halved net profit. Precisely because it is a design that takes the pain first, the verdict on this decision will split on whether it can reach an ROE of 10% and an adjusted operating margin of 10% in fiscal 2028. A prospect has emerged of net profit rebounding 2.2-fold the following year, to March 2027, but whether that can be turned from a one-off effect into sustained growth will decide success or failure. This reform, taking the pain early while in the black, mirrors a challenge common to Japan’s big companies: how to reconcile short-term pain with long-term growth.