Olympus confirms 7 percent reduction in workforce
The company says that it will cut its global workforce by about 2,700 employees by March 31, 2014, as part of a broader restructuring plan.
As expected, Olympus has confirmed that it'll be reducing its workforce by 7 percent, as the company tries to regain its footing in the wake of its crippling scandal.
According to Olympus, the company will cut 2,700 employees from its global workforce between now and March 31, 2014. The move is part of a broader restructuring that could see major changes across the company's subsidiaries, global production sites, and other divisions.
The cuts Olympus plans to make are actually a bit deeper than expected. Last week, Japanese news outlet Nikkei Business Daily reported that the company would cut approximately 2,500 jobs from its payroll. That followed reports from Japanese newspapers, claiming Olympus is trying to woo investors that would want a 10 percent equity stake in return for hundreds of millions of dollars.
Olympus' troubles started -- on paper, at least -- back in October when its dismissed president and CEO Michael Woodford presented documents to the media showing the company engaging in odd accounting practices, payouts, and other financial dealings designed to coverup its losses over more than a decade. When the dust finally settled, the alleged fraud was valued at about $1.7 billion, leaving the company in a severely unstable spot.
Things took an even worse turn for Olympus in February as seven people, including its former chairman and president, Tsuyoshi Kikukawa, were arrested for their alleged connection with the scandal. That news came just after it announced that it would lose about $410 million this year -- a figure that has sent investors fleeing.
In an attempt to bring them back, Olympus today unveiled a "medium-term vision" designed to accompany its layoffs. That vision includes realigning its operation around its medical, life science, and imaging businesses, and focusing its resources on the medical side. The company also plans to consolidate 40 percent of its 30 production sites around the world and dispose of underperforming assets.
If all goes well, Olympus expects its sales to rise from 920 billion yen ($11.6 billion) this fiscal year to 1.2 trillion yen ($15 billion) at the end of its 2017 fiscal year. It hopes to post a profit of 85 billion yen ($1.07 billion) by 2017.