Olympus Corp. (OCPNY.PK), which is trying to recover from its accounting scandal, on Friday said it would cut around 2,700 jobs and restructure global manufacturing operations as it aims to cut costs significantly following last year's severe net loss caused by the scandal. The Japanese camera and medical equipment maker said it expects to record a profit in this year and has set up a new medium-term vision to regain its credibility.
The company's vision for the five years from fiscal year ending March 2013 to 2017 is based on the new management structure with "Back to Basics" as the slogan.
As part of its various initiatives, the company plans to significantly reduce costs mainly through the restructuring of subsidiaries and production sites, resulting in the reduction in total workforce by about 7 percent by 2014. The firm currently has almost 40,000 employees worldwide.
Olympus will also eliminate or consolidate approximately 40 percent of the 30 production sites currently operating around the world by fiscal year ending March 2015. Olympus would also take measures to curtail procurement costs by controlling its functions in an integrated manner.
The reputation of Olympus, known for its cameras and medical imaging equipment, were badly damaged after its former Chief Executive Michael Woodford revealed the accounting issues last year, triggering international investigations and lawsuits by investors.
Expressing regret for its past misconduct, the company aims to achieve growth with profitability by adopting "Back to Basics" as the principle behind all actions and strategies. Olympus said it plans to make a concerted effort to share values and goals among all its employees around the world with the aim of building "One Olympus."
For achieving a profitable growth, the company plans to redefine its core business domains, and Medical business will aim for expansion of emerging markets to increase profitability. Expansion of target markets would help the Life Science & Industrial business, while in the Imaging business, the company will focus on mirrorless interchangeable-lens cameras and high-end compact cameras.
For fiscal 2013, Olympus projects net income of 7 billion yen and net sales of 920 billion yen. This is in comparison to a net loss of 49 billion yen and net sales of 848.5 billion yen in the year ended March 2012.
By 2015, the company aims for net income of 40 billion yen and net sales of 1.01 trillion yen and by the end of five year plan at 2017, net income would reach 85 billion yen and net sales would be 1.16 trillion yen.
By 2017, the company also expects return on invested capital and operating margin of 10 percent and more in comparison to last year's 2.7 percent and 4.2 percent, respectively.
In its statement, the company today said it aims to return to the basic values it had at founding and make a fresh start in order to regain the credibility of its stakeholders, build itself anew, and create new corporate value.
In Japan, Olympus shares closed Today's trading at 1,297 yen, down 49 yen or 3.64 percent.
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