OSAKA -- Matsushita Electric Industrial Co. will transfer 1,200 clerical and other employees to an office business subsidiary as it cuts further into labor costs, company officials said Friday.

Of the 1,200 to be sent to Matsushita Business Services Co., 200 aged 55 and over will lose their status as employees of the parent company and will become employees of the subsidiary. The remaining 1,000 will remain employees of Matsushita Electric.

The clerical workers will be joined by drivers and security guards in the transfer.

Employees who refuse the move to Matsushita Business Services will be transferred to other sections of the parent company, the officials said.

Matsushita Electric is currently farming out the printing of in-house documents and the procurement of clerical supplies to the subsidiary.

The mandatory retirement age at the parent company is 60, but the 200 who will be re-employed by Matsushita Business Services have the option to work until they are 65, the officials said.

However, their salaries at the new firm will be much lower than at the parent company.

Matsushita Electric will make up for the difference with extra retirement allowances, the officials said.

Camera-phone hybrids

Domestic shipments of cell phones with built-in cameras will reach about 23 million units by the end of this fiscal year, marking a 3.8-fold increase over the previous year, the Yano Research Institute said Friday.

The independent market research company said in a report that the popularity of such phones and so-called third-generation mobile phones capable of high-speed video transmission will help lift the overall market significantly.

The total number of subscribers of mobile phones and personal handy-phone system services will reach 81.84 million by the end of March, up 9.4 percent from a year earlier, it said.

Among Japan's mobile phone service providers, J-Phone Co., a unit of Britain's Vodafone Group PLC, has been enjoying strong demand for its mobile phones with cameras. Competitors, including KDDI Corp. and NTT DoCoMo Inc., are working to catch up with J-Phone by introducing their own ranges of phones with built-in cameras.

The institute said phones with cameras will be the main item in the market during the gift seasons at the yearend and next spring.