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.
Hitachi officials refused to give the breakdown of any U.S. job losses,
saying only that 13,370 of the cuts would affect operations in Asia. With
the 14,700 total, that leaves only 1,330 possible U.S. job
losses. Officials said the majority of the reductions would come through
attrition and management overhauls and be completed sometime around April
2002.
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.