The company will include the job cuts in its business reconstruction program to be announced as early as this summer.

Sharp, unable to reverse its deteriorating earnings, has made it an urgent task to reduce fixed costs. It may implement the job cuts by the end of this fiscal year at the earliest.

Since the management crisis at Sharp first surfaced, the company has twice implemented large-scale business restructuring measures aimed at reducing labor costs.

In conjunction with each restructuring effort, Sharp has requested the voluntary retirement of employees. In fiscal 2012, about 3,000 employees accepted the request and retired, and in fiscal 2015, about 3,200 did so.

Sharp’s business performance remains shaky. For the 2015 business year, which ended March 31, 2016, it is predicted that when the company reports its after-tax earnings it will be about 300 billion yen (US$2.75 billion) in the red.

It is highly likely that Sharp will temporarily descend into a situation in which the value of its debts will be larger than that of its assets.

An agreement has been made for Sharp to go under the umbrella of Hon Hai Precision Industry Co., a major electronics manufacturer in Taiwan. Hon Hai will provide 388.8 billion yen of capital to Sharp.

Though Hon Hai expressed its intention to maintain jobs at Sharp, it is likely that Sharp was forced to come to the decision that job cuts are essential for quick reduction of its fixed expenditures.

It is believed that Sharp is considering cutting about 2,000 total jobs in its solar power and the head office administrative affairs divisions, and 1,000 jobs in its photocopier division.