Hitachi Calls For $1 Billion Overhaul
Page 1 of 1
Japanese manufacturing giant Hitachi Ltd., executives announced plans for a $1 billion overhaul and plans to cut 14,700 employees from the rolls, officials announced Friday.
The job cuts, which reflect only 4.3 percent of the company's total work force, was blamed on continued downturn in the semiconductor and high-tech markets in the U.S., which have not rebounded since the tech crash last year.
Company financial officers also revised their fiscal year 2001 estimates, saying they now a loss of around $1 billion, down dramatically from optimistic reports earlier this year of a $757 million profit.
Etsuhiko Shoyama, Hitachi president, said the depressed economy didn't rebound as fast as industry analysts had expected. "We cannot hope for positive change anytime soon," he said to reporters at a press conference.
To shore up losses sustained in the semiconductor sector, Hitachi plans to reduce its investment stake by more than 42 percent, from roughly $1 billion to $505 million. Future overall investment spending will be reduced by 20 percent, or $5 billion.
As part of its revival plan, Hitachi will stop production at its cathode-ray plants in Singapore and Malaysia, and merge or shrink any electronic devices subsidiaries, while concentrating on ever-popular products like flat-panel laptop monitors and mobile phones.
To evaluate which Hitachi subsidiaries should be reduced or eliminated, headquarters officials will tag every unit in the company with a Future Inspiration Value (FIV). The FIV will index the relative future value of each unit and reorganize.