Fujitsu's UK staff braced for heavy job losses

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Fujitsu's UK workforce was yesterday preparing itself for the worst after the Japanese semiconductor company confirmed it was shedding 16,400 staff across its global operations.

The bulk of the cuts, which amount to 9 per cent of its workforce, will fall outside Japan, where 5,000 positions will be axed.

While Fujitsu would not reveal how many of the job losses would be in the UK, it is thought several hundred positions could be at risk. Its two biggest UK-based divisions are ICL, which employs 11,000 of its 19,200 UK staff, and DMR, which employs 8,500 workers globally.

A spokesman for ICL said he thought around 900 jobs would go across DMR and ICL, 3 per cent of their combined global workforce, and thought 600 of those losses would be at ICL.

However, he thought it unlikely that ICL's UK workforce would be too hard hit since the company had already made 850 redundancies last year as part of a restructuring.

But Birmingham-based Fujitsu Telecommunications, which employs 1,470 workers, was expected to cull 220 positions.

The Manufacturing Science Finance union, which represents many of ICL's UK-based workforce, yesterday called on Fujitsu to implement an "innovative approach" to the job cuts that reflected the company's Japanese culture "rather than the 'slash and burn' approach favoured by US and UK companies".

Fujitsu's restructuring, which will cost it 300bn yen (£1.72bn), will see it focus more heavily on software and services. It is expected to save it around 100bn yen a year.

"Although the IT segment is expected to show the highest growth among industries in the mid-term, the current situation is very severe," it said, adding it thought a "gradual U-shaped recovery of the market" was likely to begin in 2002 or later. The company is targeting operating profits of 400bn yen in 2003.

A major cost-cutting drive had already been flagged by Fujitsu when it reported its first quarter figures at the end of last month.

It shocked the market then by forecasting a 220bn yen net loss for 2001, mainly to reflect the restructuring charge, compared with previous guidance of a profit of 50bn yen.

Sales, it said, were expected to total 5.4bn yen compared with previous expectations of 5.8bn yen.