Struggling Fujitsu to Cut 5,000 Jobs in Reorg

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Fujitsu is to undertake "full-fledged structural reform" and shed thousands of staff after posting third-quarter results that show a stuttering PC business and a tough sales climate for infrastructure solutions.

Editor’s note:  As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.

Fujitsu Ltd. is to undertake "full-fledged structural reform" and shed thousands of staff after posting third-quarter results that show a stuttering PC business and a tough sales climate for infrastructure solutions. The Japanese tech giant is also spinning out its chip business into a joint venture with Panasonic Corp.

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For Fujitsu's fiscal Q3, which closed at the end of 2012, the vendor posted sales of just over $12 billion representing a 2.9 percent decline on the corresponding period last year. Restructuring costs related to the rejig of the semiconductor unit contributed to the firm posting a net loss of $908 million.

The vendor's Technology Solutions business saw global Q3 sales rise 2.1 percent year on year to $8 billon. The softness of the Japanese yen put a shine on the results, as sales outside Fujitsu's homeland declined 1 percent in constant currencies, but rose 2.7 percent as reported in yen.

In a statement, the firm outlines that "sales of infrastructure services fell due to the impact of cutbacks in corporate spending and fiscal austerity measures stemming from the economic downturn in Europe".

There was more bad news in Fujitsu's PC and phone business – dubbed Ubiquitous Solutions – which saw revenue decline 11.5 percent year on year to $3.06 billion as it endured an operating loss of $23 million.

"Fujitsu's device business, its business outside Japan and PC business have deteriorated significantly from projections announced at the beginning of the fiscal year," said president Masami Yamamoto.

The Device Solutions chip business also endured a poor Q3, with turnover down 6.3 percent annually to about $1.5 billion, and operating losses spiraling to $107 million. The unit is now to be merged with the equivalent division of Panasonic and run as a separate company.

"Fujitsu aims to streamline production capabilities and rationalize personnel resources to achieve a more compact organization with stable business operations," said the vendor in a statement.

Elsewhere across the business, the company will be reducing its headcount by 5,000, with another 4,500 being transferred to new divisions or roles. Fujitsu also intends to "streamline corporate headquarters" and conduct other "cost-reduction activities".

"The full-fledged structural reform measures that we have announced today are intended to address the issues [our] businesses present, and will strive to bolster our ability to achieve profitable growth the next fiscal year and going forward," added Yamamoto.

For more UK channel coverage from CRN, visit www.channelweb.co.uk

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