Toshiba to cut 20,000 jobs globally-media
(UPDATE: Adds details, analyst comments)
By Edmund Klamann
TOKYO, Aug 25 (Reuters) - Toshiba Corp, Japan's largest chipmaker, will cut 20,000 jobs globally, more than 10 percent of its work force, as this year's steep info-tech downturn bites deeply into profits, Japanese media said on Saturday.
Toshiba had been widely expected to slash its earnings forecasts and draft a restructuring plan after similar moves in recent weeks by rivals NEC Corp and Fujitsu Ltd , as Japan's lumbering electronics giants face their second round of massive retrenchments in less than three years.
The mass-circulation Asahi said, without quoting sources, that Toshiba would lay off workers overseas, although like NEC and Fujitsu it would probably take a softer approach at home with voluntary retirements and transfers to other companies.
No official comment was immediately available from Toshiba.
The Nihon Keizai Shimbun business daily reported the domestic payroll cuts would exceed 10,000 and the company would lower its consolidated operating profit forecast for the business year to next March to about 10 billion yen ($83.4 million) from a forecast of 200 billion yen issued in April.
An announcement of the plans was likely early next week, it said.
SHARED MEMORY
Several analysts have recently trimmed their estimates for Toshiba's 2001/02 operating profits to the 45-70 billion yen range and Lehman Brothers analyst Scott Foster said the numbers in the Nihon Keizai ``shouldn't be surprising people''.
A more important focus for the market, he said, would be Toshiba's intentions for its loss-making memory chip operations, which were battered by a tumble in prices over the past year.
The Nihon Keizai said Toshiba, which already announced early this month it would cut its dynamic random access memory (DRAM) chip making capacity by one fourth, was now in talks with Germany's Infineon Technologies AG about combining their memory chip operations.
Toshiba and Infineon already have a joint memory chip development project and Infineon's parent Siemens AG teamed up with Toshiba to develop next-generation mobile phones.
The paper also said Toshiba was expected to discuss a memory chip deal with South Korea's Samsung Electronics Co Ltd , the world's largest DRAM maker and, along with Toshiba, a leading producer of NAND flash memory used in MP3 audio players and other portable devices.
DUMPING DRAM
The Nihon Keizai said Toshiba is eyeing two separate memory chip joint ventures, one for DRAM in which it would hold less than 50 percent and another for flash memory in which it would retain majority control.
``It's dangerous to make too much of potential tie-ups until both parties make public statements,'' warned Lehman Brothers' Foster, although he took a positive view of how Toshiba's restructuring plans were shaping up.
``The first announcement was a good first step and this looks like a logical next step,'' he said.
NEC, Japan's second-largest chipmaker, said last month it would shift all of its DRAM operations to a 50-50 joint venture with Hitachi Ltd by 2004 and would eventually lower its stake, perhaps drastically.
Prices for DRAM chips, used largely in personal computers, have fallen about 90 percent over the past year, reflecting the extreme volatility of recent years due in large part to increased competition from Korean and Taiwanese producers.
The global semiconductor industry is also facing its worst slump ever this year after a sudden slowdown in demand for PCs, cellphones and networking equipment late last year.
The Nihon Keizai quoted Toshiba President Tadashi Okamura as saying his company expected a rebound in the IT sector ``will come in 2003 or later''.
The IT slump has also taken a heavy toll on share prices of Japan's chip and electronics makers. Toshiba's shares have shed 25 percent of their value since the start of the year, ending Friday trade at 572 yen, unchanged from the day before.
But Lehman Brothers' Foster, who has a ``buy'' rating on Toshiba, believed the worst may be over for the share price.
``We think most of the bad news is discounted,'' he said. ``On price-to-sales, it's at the bottom of its historical range.'' |
