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To: J Fieb who wrote (3893)	8/20/2001 3:35:31 PM
From: trendmastr	Read Replies (2) \| Respond to of 4808

Monday August 20 7:13 AM ET Fujitsu Announces Global Job Cuts By Edmund Klamann TOKYO (Reuters) - Japanese chip and computer conglomerate Fujitsu Ltd. said on Monday it would slash 16,400 jobs, nearly 10 percent of its global workforce, sharply cutting offshore staff to fight back at the info-tech slump. ``The chip sector and the IT (information technology) sector have seen an unprecedented deterioration,'' Fujitsu President Naoyuki Akikusa told a news conference. The world's third-largest flash memory chip maker and Japan's second-biggest personal computer maker said it will cut 11,400 jobs abroad and 5,000 in Japan by next March, with nearly 2,000 of the overseas reductions already completed. Fujitsu, which stunned financial markets in July with a loss warning, said the job cuts and reforms would help it to generate a 400 billion yen ($3.3 billion) operating profit in the year from April 2003, against an 80 billion yen profit forecast in 2001/02. The company said it would focus its resources on software and services, aiming to secure stable profits over the long term even if growth stalls in the global info-tech sector. Analysts mostly welcomed the turnaround plan and investors marked Fujitsu's shares up 2.8 percent to 1,245 yen at the close of trade, outperforming a 1.64 percent drop in the Nikkei average ``Fujitsu seems to be moving in the right direction in its apparent attempt to cut costs and maintain or raise the level of earnings,'' said Kunihiro Hatae, general manager at Tokai Tokyo Securities' equities trading division. ``It's aggressive,'' said UBS Warburg analyst Yoshiharu Izumi. ``Since their sales forecast was cut sharply, the only thing they can do is to cut costs.'' OVERSEAS BURDEN As part of the restructuring, Fujitsu will also make its plant in Gresham, Oregon, which produces flash memory chips used in cell phones and consumer electronics, into a joint operation with California-based microchip maker Advanced Micro Devices Inc The company declined to give a regional breakdown of the planned overseas job cuts, although a hefty 4,200 will come in its hard disk drive operations, with plans to halt production of drives for desktop PCs at plants in the Philippines and Thailand. Fujitsu executives defended the heavy burden on overseas plants and plans to boost efficiency by focusing development and production operations at home. Domestic job cuts will be met through an early retirement scheme, natural attrition and cuts in contract employment and at affiliated companies. ``With regard to concentrating operations domestically, what I'd like you to understand is that the issue is not whether they're overseas or at home, but rather that development and production are spread all over the place,'' Executive Vice President Takashi Takaya said. The job cuts far outdistance a cut of 4,000 planned by rival chip conglomerate NEC Corp and several thousand expected at consumer electronics giant Matsushita Electric Industry Co Ltd. T), although a drastic restructuring at Nissan Motor Co Ltd., which helped spur the ailing automaker's dramatic return to profitability, included a heftier reduction of 21,000. RESTRUCTURING REWARDED Fujitsu has struggled in recent years to restructure overseas computer acquisitions Amdahl and ICL while integrating them with its plans to become a service and software-oriented firm similar to International Business Machines Corp Monday's reform plan called for the service and software division to earn more than 40 percent of Fujitsu's 6.1 trillion yen in revenues targeted for 2003/04, and Takaya said the figure would approach 60 percent when the service portions of the information, communications and device divisions were added in. The plan was promised by the company late last month when it announced hefty losses for the April-June quarter and forecast a 220 billion yen consolidated net loss for the year to next March. At that time Fujitsu's shares were hovering at four-and-a-half-year lows and several analysts complained about the company's optimistic targets and aggressive plans to expand flash memory output despite this year's sudden chill in demand for PCs, cellphones and networking equipment. Fujitsu's shares have risen 20 percent in the wake of the July announcement, although they are down 25 percent since the start of the year. Shares in NEC, which has also embarked on a far-reaching restructuring program, have dropped a slightly more modest 22 percent this year. On Monday, NEC fell 2.13 percent to 1,605 yen. Fujitsu said costs connected with the restructuring plan were already incorporated in its earnings forecasts issued last month.