Fujitsu to Cut Nine Percent of Work Force

NEWYou can now listen to Fox News articles!

Determined to put a stop to its losses amid a worldwide electronics slump, Japanese manufacturer Fujitsu is slashing 9 percent of its global work force as part of its turnaround strategy.

Fujitsu will cut 16,400 jobs from its global work force of 180,000, president Naoyuki Akikusa said Monday. About 11,400 of the job cuts will be at its overseas operations.

Fujitsu did not give a specific breakdown by country but said about 5,000 jobs in the electronic devices and other sectors will be cut in Asia outside Japan and nearly 3,000 telecommunications jobs will be reduced in North America.

It was not clear where the remaining 3,400 overseas job cuts would come from.

In Japan, Fujitsu will eliminate 5,000 jobs, half of them by retirement. The other half will come by eliminating the jobs held by workers sent in from affiliated companies. All the cuts will be carried out by March 2002.

"The needs of the market are changing very rapidly," Akikusa told reporters. "We need to adopt a global perspective."

Fujitsu will make its plant in Gresham, Ore., which employs 860 workers, a 50-50 joint venture with U.S. chipmaker Advanced Micro Devices, officials said. Fujitsu has several plants in the United States, but the company would not disclose the exact figure.

The big challenge for Fujitsu is turning profits even during a global slowdown and breaking away from its dependence on U.S. demand, the officials said.

At a time when its rivals are all cutting costs and battling for market share, Fujitsu needed to respond more quickly to the U.S. downturn, said Scott Foster, analyst with Lehman Brothers in Tokyo.

"Fujitsu is down in the trenches with everybody else. It's not going to be easy to maintain their competitive edge," he said.

Investors welcomed the news from Fujitsu, which was announced shortly before trading ended in Tokyo and surpassed recent speculation in the Japanese media. Fujitsu share prices rose nearly 3 percent to close at $10 on the Tokyo Stock Exchange.

Fujitsu, based in Tokyo, lost $460 million in the first quarter that ended in June and forecasts losses for this fiscal year. It has already booked a one-time charge of $2.5 billion for restructuring costs for fiscal 2001.

Like its Japanese rivals, Fujitsu has been hit by the global downturn in the demand for chips and other electronics products.

NEC Corp. is slashing 4,000 jobs — about half of them workers from subcontractors. The total includes 1,800 regular NEC employees, or 1.2 percent of the company's global work force.

Matsushita Electric Industrial Co., long famous for its Japanese system of lifetime employment, has announced a voluntary early retirement plan to try to coax several thousand of its Japanese group workers to quit.