Feeds

Fujitsu plans cuts, predicts two more years to recovery

CFO paints gloomy picture

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

ComputerWire: IT Industry Intelligence

Fujitsu Ltd is planning job cuts and believes that the market will not recover for another two years. The Tokyo, Japan-based computer giant said the WorldCom scandal and concerns over the US economy, will almost certainly mean further restructuring this year, despite the fact that its profit target remains on course.

Fujitsu chief financial officer Takashi Takaya said in an interview that one target for job cuts and consolidation is the company's US telecommunications equipment business, to which the company is heavily exposed. Also at risk is Fujitsu's domestic hard disk drive operations, with a consolidation of production facilities now under consideration.

The demise of WorldCom has meant that the company will lose approximately $20m in orders, and it believes that the scandal will delay a recovery in the global communication equipment sector. Takaya added: "We have to slim down further in North America so that we can hold on until a recovery, possibly in about two years."

Over the last year Fujitsu, like other Japanese chip and electronics giants took drastic restructuring steps by closing plants and slashing jobs when confronted by the economic downturn. It is likely that the proposed restructuring will include both headcount reductions and cutting facilities.

Regarding the company's earnings performance, Takaya said the company is not thinking of cutting its operational profit target of 100bn yen ($857m), since the weakness in the telecoms equipment market is expected to be offset by strengths in other areas such as semiconductors.

© Computerwire.com. All rights reserved.

Boost IT visibility and business value

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.