TOKYO -- Honda Motor Co. slashed its earnings forecast and announced further cuts in its Japanese production and work force, as global demand for cars continues to falter and the soaring yen hits its overseas profit.

Honda, Japan's No. 2 car maker by volume, Wednesday cut its net profit forecast for the fiscal year ending March 2009 to 185 billion yen ($2.08 billion) from the 485 billion yen profit it expected in late October. In the year ended March 31, 2008, Honda's net profit totaled 600.04 billion yen.

This...