Report Says Fujitsu to Fire Up to 15,000

Fujitsu Ltd., Japan’s biggest maker of business computers, will fire as many as 15,000 people--or almost 10% of its work force--as part of a previously announced financial restructuring, according to the Japanese newspaper Nihon Keizai, which did not cite sources.

Tokyo-based Fujitsu, which forecast a $1.83-billion group net loss this year, will make most of the job cuts by combining and closing some plants, the report said.

The majority of jobs will come from operations in North America and Asian countries outside of Japan, at the company’s computer and mobile-phone businesses, according to the news report. Fujitsu will fire about 3,000 people in its home country, the report said.

Fujitsu has suffered from falling electronics prices and the slowing Japanese and U.S. economies.

Worldwide personal computer sales fell 1.9% in the three months ended June 30 as compared with the same period a year ago, researcher Dataquest Inc. said last month. Making matters worse for the company, mobile-phone shipments may fall this year for the first time in the industry’s two-decade existence, according to projections by Sweden’s Ericsson and Morgan Stanley Dean Witter & Co.

“My impression is, Fujitsu’s finally doing what it’s supposed to do, as Fujitsu had done nothing so far,” said Akira Hiramine, chief investment officer at Invesco Asset Management Ltd., which manages $7.7 billion in Japanese equities. “I would find it positive, although I need more details.”

Hiramine said he would watch closely to see how Fujitsu will cut its work force, as Japanese companies tend to shift workers to affiliates and fire mostly part-timers, making actual reductions minimal. He said he had reduced Invesco’s number of Fujitsu shares.

Fujitsu spokesman Yukihiro Araki said the company would not comment on the report, but would reveal details of the company’s restructuring plans today.

The news follows reports of losses and cutbacks by other Japanese electronics makers.

Toshiba Corp., the No. 2 chip maker, will lose money in its chip business in the six months ending Sept. 30 and may cut jobs, unit President Takeshi Nakagawa said last week. Earlier this month, Toshiba said it will cut production of computer chips by almost 25%.

NEC Corp., the No. 3 chip maker, said last month it will cut 4,000 jobs in its semiconductor operations and withdraw from memory-chip production within three years. And Sony Corp., the second-largest consumer electronics maker, may fire workers in the U.S. because of slowing growth, company spokesman Kei Sakaguchi said Friday.

Fujitsu’s restructuring plans, as outlined in the Japanese news report, include halting overseas production of data-storage devices and semiconductors for personal computers, the main drag on the company’s earnings. The company is in negotiations to sell its memory plant in Oregon to Advanced Micro Devices Inc., the Nihon Keizai said.

The company also will stop development of hard disk drives for desktop personal computers, closing plants in Thailand and the Philippines, the paper said. In its telecommunications division, Fujitsu plans to halt production of switches in the U.S., the paper said.

Fujitsu hopes to improve earnings by focusing more on its software and services operations, where it predicts more growth than in hardware, the paper said.

In the short term, charges related to the job cuts will reduce Fujitsu’s earnings, said Yukio Takahashi, a fund manager with Shinko Securities Co.

“As an investor, I see a tough reality lying out there,” Takahashi said. “On a mid-term basis, we can expect an improvement on their cost structure. But I won’t be expecting a significant move until next year.”