Fujitsu to Slash Workforce by 16,000, Toshiba to eliminate 17,000 jobs

On August 20, Fujitsu Limited announced a corporate restructuring plan that will see the company slash its workforce by 11,400 overseas and 5,000 in Japan, shedding a total of 16,400 employees. This figure comes to slightly less than 10% of the group's total of 180,000 employees. Fujitsu will also restructure its semiconductor plants and consolidate its production centers as a pillar of this plan.
Fujitsu, which is expected this year to post the highest consolidated loss in the company's history, seeks to cut fixed labor costs such as personnel expenses by 100 billion yen through this restructuring plan and steer itself away from its reliance on hardware in its three main business sectors of semiconductors, information equipment, and communications equipment and more toward software and services. Fujitsu believes that by 2003 the company will be able to post an operating profit of 400 billion yen in its consolidated balance statement.
Fujitsu's plan concentrates on reducing the group's overseas workforce. Of the 5,000 domestic employees scheduled to be cut, only 2,500 will be full-time employees. Fujitsu claims that most of these cuts will come in the form of employees reaching retirement age or from implementation of voluntary retirement plans, thus maximizing domestic employment despite the cuts.
And on August 27, Toshiba Corp. also announced to slash 17,000 jobs in Japan. It will reduce its domestic workforce by 12% by fiscal 2003.
Toshiba, meanwhile, felt that conventional style of restructuring (that maintains domestic jobs intact) would no longer work. The company aimed at reforming their corporate structure to make it more agile, nimble, and lightweight, enabling it to respond to market and other changes in a flexible manner.

These restructuring plans follow on the heels of workforce reductions by electronics giants Matsushita Electric Industrial and NEC Corp. (see the JIL Labor Flash Vol. 2).