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(Updates with profit forecast in fourth paragraph)
Oct. 31 (Bloomberg) -- TDK Corp., the world’s biggest maker of magnetic heads for disk drives, plans to cut about 12 percent of its workforce and sell its organic light-emitting diode display business, after profit plunged.
About 11,000 jobs may be eliminated as net income dropped 74 percent in the six months ended Sept. 30, the Tokyo-based company said in a statement today. The company will also sell some unused assets worldwide and reduce fixed costs, it said.
TDK joins Panasonic Corp. in announcing plans to cut jobs after a strengthening yen, which touched a postwar record against the dollar today, caused losses. Thailand’s worst floods since 1942 forced some plants in the country to shut temporarily and caused parts shortages that have led to a wider halt in production on some lines.
The TDK workforce reductions are scheduled to begin as early as this fiscal year, the company said.
Net income dropped to 6.7 billion yen ($86 million) in the six months ended Sept. 30, compared with 26.1 billion yen a year earlier, TDK said today in a statement. Profit will probably be about 20 billion yen this fiscal year, compared with a previous forecast for 50 billion, partly because of the stronger yen and the floods in Thailand.
The electronics parts maker based its earnings forecast for the second half on an exchange rate of 76 yen versus the dollar and 105 yen to the euro, compared with its earlier estimate of 80 yen and 110 yen, respectively.
TDK fell 1.2 percent to 3,270 yen at the close on the Tokyo Stock Exchange before the company announced its earnings and planned job cuts.
Organic light-emitting diode displays use a rival technology to liquid-crystal displays to make panels for devices including smartphones.
--Editors: Kyung Bok Cho, Dave McCombs.
To contact the reporters on this story: Naoko Fujimura in Tokyo at email@example.com; Kyung Bok Cho in Tokyo at firstname.lastname@example.org
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