OSAKA -- Financially ailing Nankai Electric Railway Co. has unveiled a radical restructuring program, saying it will slash more than 20 percent of its workforce, reduce pay and close down unprofitable subsidiaries.

Nankai, a major private railway operator in western Japan, is projecting a 53.3 billion yen net loss on a consolidated basis for the business year that ends March 31. The debt is substantially higher than the 2.5 billion yen loss projected in November.

In a statement released Friday, Nankai said it plans to reduce its workforce from 3,170 staff at present to 2,500 by the end of March 2005, primarily through attrition and a moratorium on new hiring.

An early retirement program is not being contemplated at present, the firm said.

Nankai says it will cut basic pay for employees by 10 percent beginning in April, while the company will also reduce annual bonuses to four months of monthly pay, down from the five months paid in the current fiscal year.

The firm says it will seek union approval before implementing the belt-tightening measures.

Company executives with director positions will face deeper cuts in pay, which will be reduced by between 30 percent and 50 percent from this month.

Nankai blames the company's problems on a decline in revenues from its railway business because of a falling number of commuters.

Officials link the difficulties in the railway business to the public's gradual shift to using cars as well as the halt in Japan's population growth. In addition to problems in its core railway business, Nankai has also reported difficulties in its leisure businesses and says it plans to merge of close some 10 money-losing subsidiaries by the end of 2003.

Nankai said it will also skip an end-of-term dividend payment.

Makoto Yamanaka, president of Nankai, issued an apology to shareholders and promised to get the company's earnings back in the black in fiscal 2002.