Matsushita, Panasonic’s phone maker, slims down

Matsushita Electric Industrial, the Japanese manufacturer of Panasonic cellphones, is slimming down their business to cut costs and increase their competitiveness in the tight mobile market. They will be laying off 1,400 employees, many of them in the Philippines.

Matsushita will also be halting the manufacture of GSM handsets to concentrate entirely on 3rd generation models. “We’ve operated GSM manufacturing since 1992, but the situation has become severe due to increasing competition and declining prices,” said president Yoshiaki Kushiki.

To cut costs the company will focus primarily on the development of products that are more advanced. As a result, they will concentrate on their domestic operations while cutting overseas divisions.

The company will focus on a single Linux platform for all phones for the domestic and international markets. This move will cut costs, simplify operations and allow for R&D operations throughout the world to be closed.

The company isn’t in dire straits – It expects a net annual profit of about $840 million. This, along with a restructuring earlier this year, is hoped to make the company competitive in the price wars which have hurt major companies like Sony and Pioneer.