Olympus eyes 2,500 job cuts, overseas plant shakeup

Kyodo

Scandal-hit Olympus Corp. may seek to slash more than 2,500 jobs in efforts to rejuvenate its slumping digital camera business, mainly by restructuring its overseas plants and adjusting its product lineup, sources said Wednesday.

The company, which has been struggling to beef up its capital base ever since its loss coverup scandal broke last October, is also aiming to strengthen its medical equipment and industrial machinery units to increase profitability, while at the same time unloading units deemed unrelated to those operations, the sources said.

The envisaged job cuts would affect more than 6 percent of the group’s roughly 40,000 employees, and would be incorporated in restructuring measures the company may possibly announce in a new business plan in early June, the sources said.

The manufacturer of medical equipment and cameras is also reportedly in talks with Panasonic Corp. over a capital and business tieup to shore up its battered finances, a deal that could see the electronics giant become its largest shareholder, according to the sources.

In addition to Panasonic, Sony Corp., Fujifilm Holdings Corp. and Terumo Corp. are considered potential business alliance candidates. Olympus plans to make a decision by the end of June, the sources said.

Olympus is hoping these measures will help to raise its consolidated capital adequacy ratio to around 30 percent within the next five years. As of the end of March, the ratio had fallen to just 4.6 percent because of the elaborate accounting scheme the company used to disguise losses dating as far back as the 1990s.

As for its loss-making digital business operations, Olympus will consolidate its digital camera plants in China and Vietnam, while streamlining a production base it has acquired in the United States, the sources said.

The company also plans to strengthen its lineup of mirrorless interchangeable-lens cameras and cut back on products facing particularly stiff price competition from global rivals, the sources said.

On its medical equipment business, the company is expected to concentrate its managerial resources on products manufactured mainly domestically, including in Aomori and Fukushima prefectures, according to the sources.

After Olympus admitted to concealing ¥117.7 billion in investment losses at the end of last year, former Chairman Tsuyoshi Kikukawa and other prominent executives were arrested and indicted on suspicion of falsifying financial statements.