Panasonic to cut 40,000 workers over two years: source

TOKYO (Reuters) - Japanese consumer electronics giant Panasonic Corp <6752.T> will decimate its global workforce, slashing 40,000 jobs over the next two years in a bid to pare costs and remain competitive, a source said on Thursday.

The company, which employs about 380,000 people, will incur more than 100 billion yen ($1.22 billion) in expenses this year related to the job cuts and a reorganization of production facilities, the Nikkei newspaper reported earlier.

Once unrivalled, Japan's consumer electronics firms are facing increasing competition from Korean and Chinese rivals in particular. Sony Corp's <6758.T> loss of its dominance in personal music players to Apple Inc's iPod was another reminder to corporate Japan of its declining influence.

Panasonic President Fumio Ohtsubo will speak to reporters at 0600 GMT on Thursday in Tokyo, when Panasonic announce its earnings for the year ended in March 31.

Panasonic spokesman Toshihiko Shibuya said the job losses had not been announced by his company and declined to elaborate.

Unlike their western counterparts, Japanese companies tend to avoid dumping large numbers of workers, particularly at home.

Panasonic's cut, however stand out not just in Japan but ranks among some the biggest layoffs ever, a level not seen since U.S. financial firms shed thousands of people in the wake of the Lehman shock in 2008.

Panasonic's cut is equal to about all the jobs lost in the United States in March according to data released by Challenger, Gray & Christmas, Inc, an outplacement firm that compiles monthly U.S. employment numbers.

Shares of the electronics conglomerate rose 2 percent in Tokyo in morning trade on Thursday, outpacing a 1.4 percent gain in the benchmark Nikkei 225 index <.N225>.

The latest staff cuts overshadow past Panasonic restructurings including 26,000 workers shed after the information technology bubble burst, and about 15,000 in the aftermath of the Lehman shock, the paper said.

The job cuts are part of Panasonic's efforts to streamline operations after the company in April made Panasonic Electric Works and Sanyo Electric Co, wholly owned units, absorbing a combined 160,000 workers, the Nikkei reported.

Panasonic may have logged a net profit of about 70 billion yen for the year ended March 31, missing its own forecast of 85 billion yen due to lower sales since the March 11 earthquake, the paper added.

For the financial year to March 2012, net profit will likely fall 30 percent to around 50 billion yen, excluding the effects of the quake, it reported.

(Additional reporting by Arpita Mukherjee in Bangalore and Nathan Layne in Tokyo; Editing by Joseph Radford and Lincoln Feast)