Japanese electronics giant Panasonic will halt production of LCD panels in the Czech town of Zatec in December, laying off up to 615 people as the company focuses on smaller products, the CTK Czech news agency said Wednesday, quoting a company spokeswoman.
Panasonic, which has produced liquid crystal display (LCD) panels in Zatec, northwestern Czech Republic, since 2007, "is winding down its activity in the Triangle industrial park," CTK quoted spokeswoman Helena Sukova as saying.
She said the operation would be halted for "strategic reasons" and that similar production from a plant in Malaysia would wind down as well because Panasonic wants to focus on small-format panels now.
The plant in Zatec, about 80 kilometres (50 miles) from Prague, has supplied panels to another Czech-based Panasonic plant that makes TV sets, and which will maintain its production with other suppliers, Sukova said.
The decision comes on the heels of an announcement that Panasonic expects to book a $9.6 billion loss this fiscal year as the company undergoes a major overhaul of its troubled activities.
Apart from the global headwinds, Panasonic's television business has suffered from falling prices owing to stiff competition from overseas rivals.
The company has announced a major restructuring of its LCD manufacturing division, and is reportedly considering shifting all of its mobile phone handset production overseas because of high costs at home.
Reports have said that Panasonic would abandon its European smartphone business over the next several months.
Last month Moody's cut its credit rating on Panasonic, citing the struggling firm's weak profitability and high debt.