Hitachi to log record 700 bil. yen net loss for FY 2008, cut jobs+

TOKYO, Jan. 30 Kyodo - Hitachi Ltd. said Friday it expects to incur its worst-ever group net loss of 700 billion yen for fiscal 2008 due to the plunge in demand for micro chips and other products and promised cost-cutting measures totaling 200 billion yen for
the next business year that includes extensive global layoffs of mostly temporary workers.

The projected net loss, a stark reversal from its forecast in October of a
profit of 15 billion yen, would mean Japan's largest electronics maker would
remain mired in the red for the third year in a row.
''We saw a deterioration of unprecedented speed from last November,'' Hitachi
President Kazuo Furukawa said at a press conference in Tokyo, blaming a strong
yen, plummeting stock prices and dwindling consumer spending.
''Despite the dramatic change in our management environment, it is extremely
regrettable that we are foreseeing such a huge loss,'' Furukawa said.
To combat the heavy losses, Hitachi said it will cut or transfer a total of
7,000 workers worldwide during fiscal 2009. Most of the layoffs would involve
temporary workers while many permanent workers will be reallocated to
profitable divisions.
''It is most important for a company to protect employment, but we cannot avoid
taking certain measures when our operations and businesses are shrinking so
drastically,'' Furukawa said, indicating the possibility of laying off even
permanent workers.
Hitachi will also consolidate and close both domestic and overseas plants and
reduce the number of consolidated subsidiaries from 910 to 800 by the end of
March 2010.
To clarify management's responsibilities, the company also said it plans to cut
bonuses and monthly pay for executive and senior officials, but did not provide
details of the cuts or when the measures will come into effect.
Hitachi's dismal outlook comes just a day after other Japanese electronics
giants like Toshiba Ltd. and Sony Corp. also warned of massive losses ahead as
they grappled with the fallout from deepening economic troubles worldwide.
Hitachi attributed its second downward revision of its earnings projection to
plunging demand for semiconductor production equipment, automotive devices,
construction machinery, digital media equipment and other products amid the
deepening global recession.
The company lowered its sales forecast for the current business year by 8.1
percent to 10.02 trillion yen. Although the company expects to stay in the
black on an operating basis, the revised profit estimate of 40 billion yen
represents a sharp downward revision of 90.2 percent from 410 billion yen
projected in October.
Hitachi is now anticipating a pretax loss of 380 billion yen, a reversal from
an estimated profit of 310 billion yen.
Equity-method losses related to the struggling semiconductor business, foreign
exchange losses due to the yen's steep appreciation, valuation losses on
securities holdings and other losses totaling around 750 billion yen lie behind
the anticipated pretax loss.
Under the planned workforce streamlining plan, Hitachi will cut or transfer
around 4,000 workers worldwide in its automotive systems operations, which have
been hit hard by slumping global car sales. It will also cut or transfer an
additional 3,000 workers on a global basis engaged in its flat-panel TV and
other consumer electronic products operations, in which over 1,000 workers have
already been axed or transferred.
The Tokyo-based company also released preliminary business results for the
October-December 2008 quarter of the current fiscal year, including a net loss
of 371 billion yen and an operating loss of 15 billion yen on sales of 2.26
trillion yen.
Those figures compared with a net profit of 12.50 billion yen and an operating
profit of 77.87 billion yen on sales of 2.71 trillion yen during the third
quarter of fiscal 2007.
==Kyodo
2009-01-30 22:53:42