Taiwanese tech giant Foxconn said Wednesday that it would be closing some overseas operation of the flailing Japanese electronics and tech company, Sharp. Hon Hai Precision, better known as Foxconn paid 389 Billion Yen ($3.5 billion), to acquire a 66 percent stake in the Tokyo-based company back in March. While Sharp is well known for their household appliances and being a display manufacturer, the company has been making huge losses and is in debt. The firm suffered a $2.3 Billion loss in 2015.
Foxconn on the other hand is the worlds largest contract electronics manufacturer, with a long list of clients including Apple and Sony, and the company also employs over 1.3 Million people all over the globe. At the company's annual general meeting in New Taipei City, founder Terry Gou also announced that all legal procedures for the acquisition of Sharp will be completed by the end of this month and that the new management will takeover on July 1. Gou also stated that Foxconn will start overseas in the restructuring of Sharp by closing high-cost joint ventures as this will cut down on operational costs which will lead to cheaper products. Streamlining of staff is also to be introduced to Sharp, with 15 percent of Sharp's Japanese workforce expected to be laid off soon. The practice of awarding contracts to former employees of Sharp will be abolished and individual staff assessment will be implemented.
Foxconn plans on diversifying itself from rather just being a contract electronics manufacturer, and Gou is helping his company do so by investing and making use of Sharp's technology. Gou sees potential in Sharp's home appliance business and his company is working to expand sales in the US and are currently in talks with a major US-based wholesaler. Foxconn's plans of expansion comes after the Taiwanese company saw it's sales drop in the fourth quarter of last year which coincided with the slowdown at US-based Apple. However, while Foxconn is expanding globally, Gou assured that the firm will not be leaving the China market behind. Taiwan's government doesn't want to be overly dependent on China and is trying to change that by nurturing economic ties with Southeast Asian countries.
At the meeting, Gou paid tribute to his 91 year-old mother, Chu Yung-Chen who accompanied him to Japan to seal the takeover deal of Sharp. It is known that Gou famously started Foxconn in 1974 with a $7, 400 loan from his mother and with just ten elderly workers.