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Toshiba to cut 20,000 jobs: report

By staff and wires

TOKYO, Japan -- Electronics giants Toshiba and Hitachi are planning massive job cuts amid slumping global demand for information technology, media reports say.

Toshiba, Japan's largest chipmaker, will slash 20,000 jobs, including mid-level executive positions, and is considering firings overseas, transfers and early retirements in Japan, the national newspaper Asahi Shimbun said Saturday.

Toshiba spokesman Hideyuki Miyazaki declined to confirm details of the reports but said falling worldwide demand for semiconductors and other information technology equipment will force the company to announce "fairly big" job cuts as early as this week.

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"We need to create a structure that can withstand steep downturns like this one," Miyazaki said.

The plan follows previous cuts, including 8,500 jobs reduced under a plan last year, the paper said.

Television network NHK said about 14,000 of the reductions at Toshiba were slated for facilities in Japan and would account for approximately 10 percent of the company's domestic work force. It said all the cuts would be carried out over the next two years.

Hitachi spokesman Hiroaki Oi said a decision on whether to cut jobs hasn't been made yet.

"We have to wait until we see our profit numbers," Oi said. He couldn't say when that would be.

Fujistu cuts

Toshiba employs about 190,000 workers while Hitachi has 340,000, the Asahi said.

Earlier this week, Fujitsu, Japan's largest computer maker, announced plans to slash 16,400 jobs, or 9 percent of its work force, in a bid to stem red ink amid the worldwide electronics slump.

Late last month, NEC said it would cut 4,000 jobs by next March in an effort to turn around its computer chip division.

The Nihon Keizai Shimbun business daily reported the domestic payroll cuts would exceed 10,000 and Toshiba would lower its consolidated operating profit forecast for the business year to next March to about 10 billion yen ($83.4 million) from a forecast of 200 billion yen issued in April.

An announcement of the plans was likely early next week, it said.

Outlook drab

Toshiba aims to spin off its memory chip businesses, which have been hit hard by a tumble in prices over the past year, and was in negotiations with Germany's Infineon, according to Japanese media.

Technologies AG about combining their dynamic random access memory (DRAM) chip operations.

Toshiba is expected to discuss possible conditions for a DRAM deal with South Korea's Samsung Electronics Co Ltd, the world's largest DRAM maker.

NEC, Japan's second-largest chipmaker, said last month it would shift all of its DRAM operations to a joint venture with Hitachi Ltd by 2004.

The move was aimed at eventually conducting an initial public offering for the venture and reducing its stake, perhaps drastically, from the current 50 percent.

The DRAM business, which relies heavily on demand for personal computers, has experienced extreme volatility in recent years reflecting in large part increased competition from Korean and Taiwanese producers.

DRAM prices have fallen about 90 percent over the past year.

Slowdown in demand

The global semiconductor industry is facing its worst slump ever this year, as a sudden slowdown in demand for personal computers, cell phones and networking equipment late last year triggered a prolonged period of inventory adjustments and sent prices and sales volume of chips and electronic parts tumbling.

Several Japanese electronics makers have already issued dire profit warnings for the current business year, with Fujitsu and Matsushita Electric Industrial Co Ltd reporting operating and net losses for the April-June quarter.

The Nihon Keizai quoted Toshiba President Tadashi Okamura as saying his company expected a rebound in the IT sector "will come in 2003 or later."

The IT slump has also taken a heavy toll on share prices of Japan's chip and electronics makers. Toshiba's shares have shed 25 percent of their value since the start of the year, ending Friday trade at 572 yen, unchanged from the day before.








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