JVC Kenwood’s Early Retirement Solicitation Falls Short of Goal

JVC Kenwood LogoJVC Kenwood Corporation announced the final results of their voluntary early retirement solicitation first announced late last year. This solicitation was offered as part of a comprehensive effort to turn around the company’s flagging fortunes and included many steps to cut overhead and improve profitability – such as this effort to cut employment by incentivizing employees to leave the company.

Did their program succeed? See the results below…

It was November 2013 when we first brought you this story. At that time, JVC Kenwood had just announced their fiscal first-half results (for the fiscal period ending September 30, 2013) and the company surprised the market by announcing that – instead of a profit, as it originally forecast – the company was on track to lose money for the fiscal year.

Within days of that announcement, JVC Kenwood’s board of directors sprang into action and announced it would take several bold steps to improve profits, such as cutting management pay, cutting employee pay, and implementing a voluntary retirement program – aimed at senior managers – to reduce head count. And it was in this last item – the voluntary retirement solicitation – that the company had high hopes would contribute a major portion of their estimated overall program cost reduction of ¥4.5 billion ($44.3 million) by the 2015 fiscal year.

400 offered an early out…

The company offered the early retirement program with enhanced benefits to 400 senior officers 45-years of age or older. If they accepted, the employee gets an “additional retirement allowance” of an unspecified amount, as well as some type of support for reemployment services.

JVC Kenwood made this offer to senior officers at JVC Kenwood as well as some of its domestic affiliated companies. These officers had from February 6, 2014 – to – March 3, 2014 to take the company up on its offer.

Close but no cigar…

Last week, the company announced that, of the 400 applicants who received a solicitation, about 368 accepted the company’s offer. This result is short of JVC Kenwood’s goal and will trim the total program savings as a result.

About Ted

A sales and marketing specialist - primarily in the technology industry - I've experienced a sort of "circle of life" in business. I've been a mass merchant retailer, a specialty retailer, a specialty manufacturer, a large volume manufacturer, a distributor, and even represented sales representatives. Now the owner of a marketing company that works with a variety of businesses on improving their strategic marketing and business development - I analyze issues from all angles to develop holistic solutions.

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