Hitachi joins blood-letting, cuts 14,700 jobs

Hitachi unveiled a wearable computer earlier this year

By staff and wire reports

TOKYO, Japan -- Japan's largest electronics manufacturer Hitachi will cut 14,700 jobs globally by the end of next March, continuing a raft of high-tech layoff announcements from Japanese companies.

Hitachi said Friday most of the job cuts would come from its semiconductor and display units. Of the total, 10,200 would be in Japan and 4500 at its offshore plants.

Its move follows earlier announcements this week of job cuts by leading chipmaker Toshiba (about 19,000), ceramic casings specialist Kyocera (about 10,000) and electronics maker Oki Electric (2,200).

Two other Japanese tech companies, Fujitsu and NEC, said they would cut their workforces by 16,400 and 4,000 respectively in recent weeks as part of the drastic restructurings being seen in Japan.

Singapore plant not affected

Hitachi said its Singapore DRAM plant would not be affected by the planned job cuts.

In an announcement on Friday afternoon covering its restructure, Hitachi also lowered its forecast for the business year to March 2002 to a loss of 140 billion yen ($1.17 billion) from an April forecast of a profit of 90 billion yen.

Hitachi warned its operating income would drop from its original forecast of a 280 billion yen profit to zero.

It also said sales were likely to drop 10 percent to 7.85 trillion yen, down from an earlier estimate of 8.75 trillion yen. Hitachi had sales of 8.41 trillion in the year to March 2001.

It anticipates an 80 billion yen restructuring charge on a consolidated basis.

U.S. slowdown rippling around the world

Hitachi said the rapid slowdown in the U.S. economy was having a ripple effect around the world, and the sluggish pace of demand in IT-related products, such as PCs and mobile phones is lasting longer than projected at the beginning of fiscal 2001.

Hitachi plans to reduce consolidated fixed costs by 130 billion yen by March 2002. Semiconductor investment will be cut to 60 billion yen from an earlier estimate of 140 billion yen.

The company aims to reduce procurement costs by 20 percent, or about 600 billion yen, over the next two years.

It also plans to temporarily suspend manufacturing lines, cutting active front-end lines from 19 to 13, and active back end lines from 13 to 8.

Reuters contributed to this report.