Sharp Management "Inefficient" Directors + Staff To Be Axed
Sharp is set to sack 12 of their 13 directors along with hundreds of staff, following the sale of the Company to Foxconn Technology Group.
Foxconn boss, Terry Gou has described current management and the way that the Company has been operated as “inefficient”.
This is no more evident than in Australia where sales of Sharp products have slumped, after the Company was forced to exit the TV market due to poor marketing.
Also in decline is the Companies appliance business. According to GFK data the Companies fridge business is the lowest it has ever been.
18 months ago Joe Constantino, now deputy managing director at Sharp Australia, chose to restructure the Companies appliance sales and merchandising operations. After sacking long time State distributors, sales reps and agents, he moved to hiring State Training and Merchandising Managers.
He said that the move was designed to “cut costs”.
Within months both the SA and WA “Training and Merchandising” managers resigned claiming that the job description they were given when they were hired did not “match the actual job role”.
Now Sharp Australia is back trying to hire staff.
Territory Managers are now calling on stores, on Thursday nights and Saturdays as well.
According to insiders the removal of sales reps and agents has seen a “negative result on sales volumes due a complete lack of support at the coalface”.
In New Zealand where Sharp management are seen as being far more “marketing savvy” Sharp is still in the commercial TV business and is currently rolling out a new product range.
ChannelNews understands that the Australia appliance operation will be axed with one insider in Japan telling ChannelNews that the Australian operation has been “A problem subsidiary for many years”.
Under the new global structure Foxconn Chairman Terry Gou, will succeed current Sharp CEO Kozo Takahashi after the acquisition is completed.
The Sharp board will then be shrunk to nine members, with six of them to be appointed by Foxconn.
Overnight Sharp reported a net loss of $3.14 billion for its fiscal year ended in March 2016.
The company’s operating loss has more than tripled from the previous year.
Foxconn formally signed a US$3.5 billion deal to acquire Sharp last month. Mr. Gou had long coveted Sharp’s expertise at making smartphone display panels, which could help Foxconn, also known as Hon Hai Precision Industry Co., further diversify from low-margin contract manufacturing.
Mr. Gou vowed last month that he would turn Sharp around within several years by giving its engineering talent, which he has described as capable of inventing breakthrough technologies, the support they need to do so.
Last night Gou said that such a turnaround wouldn’t be possible without a fresh round of job cuts after the takeover is completed. Sharp has already cut thousands of jobs in the past few years.
“Unfortunately, a close review of the company’s operations makes it clear that the level of inefficiency throughout Sharp means that a turnaround of the company can only take place if there is a reduction in costs and that comes with a very regrettable need to reduce Sharp’s workforce,” Mr. Gou said in an email that was sent to Sharp employees on Thursday.
Last month Constantino sent a letter to Australian staff and retailers claiming that by “Combining the forces of two global technology leaders, the move is designed to make Sharp a leader in the global electronics arena and a world-class company with a positive outlook. At a local level, this is great news for the Australian team as it will strengthen operations, promote growth and reaffirm its commitment to its Australian Channel partners,” Costantino said.
He failed to mention that Foxconn management are looking to close operations and subsidiaries like Australia that are losing money or failing to grow sales.
In his letter that was sent to Australian management Gou said that future growth can only can only take place” if there is a reduction in costs, and that comes with a very regrettable need to reduce Sharp’s workforce,”.
Analysts claim that even with Foxconn’s support, Sharp will find it tough competing with Chinese display makers aggressively expanding capacity, analysts said.
Sharp also lags South Korean rivals in organic light-emitting diode (OLED) technology, which Apple is widely expected to adopt in future iPhones.
Gou, though, has expressed a preference for Sharp’s strength in indium gallium zinc oxide (IGZO) technology. “IGZO is Sharp’s pride,” said Tuan. “I’m hopeful we can cooperate with Sharp in this area.”
ChannelNews has been told that if Sharp continues to manufacture appliances and TV’s that sales in Australia will not be via a local subsidiary but via a distributor.