Taiwan tech giant Hon Hai Precision, better known as Foxconn, said on Wednesday that it plans on closing some overseas operations of Sharp, the struggling Japanese electronics manufacturer, after purchasing the company in March. Terry Gou, founder of Foxconn, suggested job cuts may be a part of the equation.
Hon Hai is the largest electronics supplier in the world. Apple Inc. is the firm’s key customer for its smartphone components.
The company will officially takeover Sharp in July. The deal represents the first foreign acquisition of a major Japanese electronics organization.
While Sharp is a well-known electronics brand, the company has struggled with tremendous debts and losses in recent years. In 2015, Sharp suffered a $2.3 billion loss.
Hon Hai purchased a 66% controlling stake in the company in March for $3.5 billion baht.
Gou, the richest man in Taiwan, has a reputation for being a harsh and demanding boss. Speaking to shareholders on Wednesday, Gou said he plans to introduce cost-cutting measures and take steps to streamline staffing.
Sharp’s overseas operations will be the first target, he said.
Gou says the company will close “inappropriate, high-cost joint ventures.” He also said Sharp’s old way of doing business will need to change, citing the company’s practice of awarding contracts to companies that are owned by former employees.
Assessment of teams and individual staff performance will also be introduced.
Japanese media reports that Sharp is considering cutting 15% of its domestic workforce, although the company has denied this claim.
Hon Hai saw it sales slip for the first time in the fourth quarter last year due to a slowdown at Apple.