Daio Paper Corp. said Wednesday it will shed over 1,000 jobs in the next three years, instead of the 900 it previously estimated, it was learned Wednesday.
Japan’s fourth-largest paper company by sales, Daio plans to announce the payroll cut Friday as part of its medium-term business plan for fiscal 2012, which began in April, through fiscal 2014, sources said.
The decision comes as the scandal-hit company strives to strengthen its financial health and become more profitable.
Daio plans to delay by two to three years the scheduled launch in spring 2014 of a new plant in Iwaki, Fukushima Prefecture, as demand for raw materials for cardboard is lower than predicted.
It will also push back by several years the opening of a new plant in Fujinomiya, Shizuoka Prefecture.
With the two launches on hold, Daio will focus on scrapping aging facilities at existing plants, including its main Mishima plant in Ehime Prefecture.
Daio plans to reduce its group workforce of 8,000 by over 10 percent by the end of fiscal 2014. It will hire fewer new employees and initiate other cutbacks, including consolidating subsidiaries.
The overall annual cut in costs from these efforts is projected at about ¥5 billion.
Daio had been battered by a scandal involving its former chairman that broke last autumn. Mototaka Ikawa, a member of Daio’s founding family, was found to have borrowed huge sums from subsidiaries mainly to cover losses he incurred at casinos.
The battle between Daio’s management and the founding family ended when partner Hokuetsu Kishu Paper Co. stepped in to become the top shareholder of Daio in August. Daio has since reviewed its previous business plan, which was unveiled in March.