Hitachi Ltd. said Friday that it will abolish 14,700 jobs, or 4.5 percent of its 324,000-strong group workforce, by the end of March to help turn around declining earnings amid the slump in the information technology sector.
The major electrical machinery maker also said it has revised downward its group earnings forecast for the current business year through March 31. It projects a net loss of 140 billion yen against the net profit of 90 billion yen anticipated in April.
It expects a group pretax loss of 65 billion yen, revised down from a pretax profit of 270 billion yen, and group sales of 7.85 trillion yen, revised from 8.75 trillion yen.
Of the 14,700 jobs, 10,200 will be slashed at home and 4,500 at its affiliates abroad. The jobs will go through such measures as attrition and early retirement, the company said.
In a major restructuring plan, Hitachi said it will reduce its group fixed costs by 130 billion yen by the end of March and slash materials procurement costs by 600 billion yen, or 20 percent, over the next two years.
It will reassess capital spending plans for semiconductors, cutting investment to 60 billion yen from 140 billion yen.
Specifically, the company will suspend some production lines at its plants in Ibaraki, Yamanashi, Gunma and Hokkaido prefectures.
It will also stop producing color display tubes for personal computers and will shift European production of TV sets to Asia.
Hitachi's move is the latest in a series of restructuring plans announced recently by electrical machinery makers. Fujitsu Ltd. has said it will cut 16,400 staff, 4,000 jobs are to go at NEC Corp., Toshiba Corp. is shedding 18,800 staff and Oki Electric Industry Co. will lose 2,200 workers.