Battered by fiscal year-end losses, Mitsubishi Electric Corp. today launched a plan to restore profitability, announcing that it would aggressively seek joint-venture partners while laying off 14,500 employees over a three-year period.
The company, which last month revised its consolidated net earnings to reflect a projected $328 million year-end loss, has struggled of late, particularly in the semiconductor and FPD sectors.
Mitsubishi embarked on a limited overseas restructuring last fall, dismantling its U.S. holding company and consolidating several electronics subsidiaries. No layoffs were announced at the time.
The latest, more sweeping shift will see the company take a hard look at its money-losing ventures. While it didn't name specific businesses, Mitsubishi said those subsidiaries that can't be made profitable will be sold, spun off, or closed by March 2001.
"A clear differentiation will be made between business sectors to be expanded and those to be scaled down and/or eliminated," Mitsubishi said in a statement issued today. "Among the sectors to be expanded, the company will aggressively pursue strategic alliances and joint business agreements with partner companies as well as the outright spinning off of operations."
Of the 14,500 jobs to be eliminated, 8,400 will come from Japan, and the other 6,100 from overseas operations.
In other areas, Mitsubishi said it will amend its charter to reduce the number of company directors from 33 to 24, and will revamp its management structure to encourage a more nimble decision-making process.
Mitsubishi estimates that the cost-cutting measures will allow it to record revenue of about $33 billion for its fiscal year ending in March 2002, up from this year's projected sales of $30 billion. The company hopes to see its net income iincrease to about $980 million.