Japanese electronics giant Panasonic, Tesla’s (TSLA) original battery supplier and one of its largest, announced today that it will lay off almost 5% of its workforce: 5,000 workers domestically and 5,000 globally. The layoffs will take place between now and March 2026 after reviewing “operational efficiency,” mainly in sales departments.
“Responsibility for management lies with me,” CEO Yuki Kusumi said in an online press conference. “I feel very ashamed.”
The chief executive currently makes ¥259 million (US$1.79 million) and will be taking a 40% cut to his compensation.
In the Osaka-based company’s latest financial report released in March, net profit was down 17.5%, with sales down 0.5%; 2025 projections were for another 15.3% drop in profits and 7.8% decrease in sales. Panasonic is aiming to improve profits by at least ¥150 billion (US$1 billion).
Recent U.S. tariffs were not mentioned in the company’s glum forecast, but increased Chinese competition from BYD (BYDDY) and CATL, was cited as a factor; both those Chinese EV giants also produce batteries for Tesla.
A slowdown in overall EV demand was also mentioned as a reason for Panasonic’s downturn, although the company secured strategic partnerships with both Mazda (MZDAY) and Subaru (FUJHY) in 2024.
Last September, the company opened a renovated plant in Wakayama, just outside Osaka, to mass produce its high-capacity EV batteries, the 4680 cells, which improve fivefold the smaller 2170 batteries. This not only increases vehicular driving range, but the number of cells required in each EV, which in turns lowers the cost. A previous bottleneck in 4680 production hobbled the release of the Cybertruck, Tesla claimed in 2023.
The Wakayama plant also aims to achieve zero-emissions, as does Panasonic’s two U.S. plants: an existing one in Nevada, and one in Kansas that was scheduled to open this spring.
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