Composite board suppliers decline for first time in a decade as prices rise
Composite board supplier Sharp is among the first companies to announce it will cut nearly half of its workforce as part of a new effort to shed costs amid soaring costs and declining demand.
The company, which employs about 1,100 people in the U.S., will lay off about 1 percent of its global workforce, or about 6,000 people, Chief Financial Officer Dan Mazzarella said in a filing Wednesday.
“The impact of these cuts will be felt across Sharp’s entire product portfolio,” he said.
Sharp is cutting about 1.3 million workers across its supply chain, or 10 percent of the company’s global workforce.
The cut affects roughly 500 employees at the company, Mazzatta said.
“We are not making this decision lightly,” Mazzarella said in the filing.
“Sharp has a very high cost structure and has been consistently operating at high margins for years.
This is a difficult time for the company and for our customers.”
Sharp’s decision comes as some of its competitors, such as Philips and LG, have announced layoffs and are cutting employees in their supply chains.
“Our company has been in a constant state of crisis, which has caused significant pain to the workforce,” Sharp Chief Executive Andy Warshaw said in May.
“As a result of this crisis, Sharp has taken some tough steps, including reducing workforce by about 1 million people and by approximately 4 million by the end of 2020.”
Sharp is one of several major players to be cut by competitors, including Hewlett Packard Enterprise (HPE), Qualcomm (QCOM), Lenovo (LNVGY), and IBM (IBM).
Sharp is also under pressure from competition from new entrants.
Apple (AAPL), Facebook (FB), and Microsoft (MSFT) are all using Sharp to bolster their own brands.
Apple has said it will eliminate about a third of its sales force and cut another 200 people.
Samsung Electronics, a key supplier of consumer electronics, has said that it is cutting more than 10 percent from its workforce and will layoff another 20,000 workers in 2019.
In addition, IBM said it is slashing 5 percent from the supply chain.
The cuts have been met with mixed reaction from the tech industry.
Facebook’s Chief Executive Officer Mark Zuckerberg has been critical of the cuts.
“Today’s announcement is the latest sign that the market is losing its grip on technology,” Zuckerberg said in an October blog post.
“It’s time to turn the page on that failed era of technology that’s left us with too many people chasing too few things.”
On Thursday, Facebook also said it would be closing its new $100 billion global research center in Menlo Park, California.
The center is expected to create a research and development center with about 1-1.5 million square feet of space in the San Francisco Bay Area.
The closure of the center will result in a 1.4 percent reduction in staff, according to a statement.
“This is a good day for the Bay Area and a sad day for Facebook,” Zuckerberg wrote.
“Facebook is the leader in machine learning, machine learning is the core of all of our products, and we will continue to invest in it.”