In order to turn around its sagging business operations, Japanese office equipment and digital camera maker Ricoh said on May 26 that it plans to cut 10,000 jobs worldwide over three years. The company was hit hard by the 2008-09 global financial crisis and the strong yen and has struggled to recover in the face of stiff competition.
The cuts from a global workforce of over 100,000, Ricoh's first major wave of job losses, will be made both at home and abroad by March 2014.
The company currently employs 40,000 people in Japan and 68,900 overseas.
Company president Shiro Kondo said no area of the company would be exempt from streamlining.
"For example, you might have 10 people working together to develop software that two people could develop. You need to question whether having more people is really speeding things up," Kondo said.
He declined to disclose the details of the job cuts, such as which countries and business segments would be affected. But the company said it would shift 15,000 workers to areas with more growth potential, such as information technology services for corporate clients.
"Ricoh has a strong global presence, so their labor contracts are more lax than (those of) traditional Japanese firms, and it's therefore easier for them to cut staff as a way to trim costs," Tatsunori Kawai, chief strategist at kabu.com, told Dow Jones Newswires. He said that a 10% cut "is huge for Ricoh and very bold."
Ricoh's announcement comes after Panasonic, one of Japan's largest tech companies, announced drastic job cuts in late April, saying it had already slashed 17,600 jobs over the past year, and planned to cut 17,000 more worldwide over the next two years.
The firm also plans to revamp or withdraw from operations where it is making losses.
Ricoh said its market was still growing in emerging nations, but added that "purchases of printing devices and paper-printing volume are expected to decline in developed countries."
It attributed the rise of a "paperless trend" to the emergence of smartphones and tablet computers.
Ricoh has seen its group net profit drop sharply in recent years -- from more than 100 billion yen (US$1.2 billion) in the year to March 2008 to 6.5 billion yen a year later. Net profit for the last business year stood at 19.6 billion yen, down 29.5% from the previous year.
Sales came to 1.94 trillion yen, missing a target of 2.3 trillion yen. Like many Japanese manufacturers, Ricoh continues to face challenges associated with the March 11 earthquake that struck northeastern Japan. The disaster caused disruption to supply chains and raised concerns about a possible power shortage this summer. Some of Ricoh's domestic production facilities were affected by the quake, but have since recovered to nearly normal operations. Ricoh estimated quake-related damage to earnings for the just-ended fiscal year at about 9.4 billion yen.
Ricoh said in its mid-term business plan it aims to achieve group sales of 2.4 trillion yen in fiscal 2013, which ends in March 2014, by expanding market share in emerging countries. It also aims at an operating profit of 210 billion yen, more than three times higher than 60.1 billion yen in the last year. The company plans to maintain capital spending at the current level, which would be 200 billion yen over the three years.
Copyright Agence France-Presse, 2011