JDI Layoff 30% Workforce Amid Weak iPhone Demands

Small to mid-sized display manufacturer Japan Display Inc. (JDI) third quarter financial results were in the red, due to lower demands than expected from Chinese clients and its largest client Apple, reported Chinese-language media Money DJ.

Tumbling revenue results has led the Japanese display company to announce it will be slashing 30% of its global workforce or 4,736 jobs by March 2017.

The biggest job cut will be in its oversea offices, where 4,100 jobs will be laid off as a result, slimming down from 10,020s to 5,920 employees.

In Japan, the company will slash 636 jobs out of the existing 5,702 empployees.

Lower than expected financial results for third quarter urged the company to implement these measures.

The company’s consolidated third quarter revenue for 2016 plummeted 24.9% YoY to JYP 196.64 billion (US $1.85 billion).

Operating margin plummeted 85.2% to JYP 1.24 billion, and the company reported consolidated net loss reached JYP 4.93 billion. Strongly contrasting from net profits of JYP138 million during the same period.

In second quarter of 2016, JDI’s mobile business, which includes smartphones, tablets and other smartphone panel accessories revenue dropped 27.1% YoY to JYP 158.57 billion. The company’s mobile division makes up 80.6% of its company revenue.

Automotive and other electronic device businesses, such as automotive, cameras, game consoles, and medical displays patent revenue and others dropped 14.1% to JYP 38.1 billion.

The outlook for the company’s fourth quarter financial results will depend on rebounding iPhone 7 demands in EU and U.S., following strong market demands from Chinese clients. JDI noted some Chinese OLED clients have returned to LCDs, which spurred rebounding revenues from July to September 2016.

Despite these positive market developments, overall demands declined for third quarter from October to December 2016, compared to the year before. The company’s estimated consolidated revenue will down 13.1% YoY to JYP 265 billion compared, while consolidated net profit will plummet 24.9% to JYP 10 billion.

JDI announced it will be restructuring on Wednesday, and has sold its subsidiary in Taiwan, Morningstar Optronic Zhuhai(MOL), to Chinese display and touch panel manufacturer Holitech Technology. Moreover, JDI will be readjusting its four business arms in Taiwan, which include STC (that will be delisted from the Taiwan bourse by this Friday), Taiwan Display, JDI Taiwan, and Kaohsiung Opto-Electronics.

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