Reports: Toshiba, Hitachi planning large job cuts

Toshiba and Hitachi are expected to announce restructuring plans this week that include in them the cut of thousands of jobs, according to weekend Japanese media reports.

          Toshiba and Hitachi are expected to announce restructuring plans this week that include in them the cut of thousands of jobs, according to weekend Japanese media reports. Toshiba will also spin off its computer memory operations and merge them with those of a foreign partner, said one report.

          A spokesman for Hitachi New Zealand says it's highly unlikely there will be any layoffs locally, as the office is “a profitable little operation”. He expects layoffs to mostly be in manufacturing division.

          Toshiba New Zealand country manager Steve Ford says the company does not expect to lay off any staff in New Zealand.

          "Toshiba world wide makes a lot more than just notebooks - we do a lot of electrical engineering and it's in this sector that the layoffs will occur."

          He says the notebook side of the company shouldn't be affected at all and he expects New Zealand to come through unscathed.

          Worldwide, Toshiba will announce 19,000 jobs cuts while Hitachi plans to cut 20,000, according to a report inthe Sunday edition of the Yomiuri Shimbun. Reports in the Asahi Shimbun and Mainichi Shimbun over the weekend put Toshiba's planned job cut at 20,000 staff.

          In doing so, the two companies will join NEC and Fujitsu, two of Japan's other electronics giants, in announcing restructuring plans and major job cuts in the last month. NEC announced in late July that it will cut 4000 jobs as part of a restructuring of its semiconductor unit while Fujitsu said last week that it plans to shed 16,400 jobs as part of a company-wide reorganization.

          The collapsing computer memory market has been one of the major causes for current financial problems at major electronics makers. DRAM (Dynamic Random Access Memory) prices have collapsed from $US9 per chip one year ago to less than $US1 per chip today -- a level at which most companies lose money on every chip they sell.

          In response to this, Toshiba is planning to spin off its entire DRAM operations, said a report in the Saturday morning edition of the Nihon Keizai Shimbun. The company has already begun talks with Infineon and will shortly begin talks with Samsung Electronics aimed at finding a merger partner for the unit to be spun off, said the report.

          The poor conditions in the semiconductor market are also leading Toshiba to predict a drop in consolidated operating profit to 10 billion yen, according to the Nihon Keizai Shimbun report. Toshiba had previously predicted it would earn 200 billion yen in operating profit this year but falling demand for semiconductors and other products has led to the large drop in expectations, said the newspaper.

          Spinning off its DRAM operations would put Toshiba on a similar path to NEC and Hitachi, which several years ago merged their DRAM units to form Elpida Memory Inc. The entire output of NEC's Hiroshima plant in Japan and Hitachi's Singapore plant go to Elpida and preparations are now underway to transfer ownership of the NEC Hiroshima plant to Elpida, NEC said recently.

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