Underlining that the Japanese commitment to full employement is beginning to be broken down by intractable market forces, Fujitsu Ltd announced yesterday that it plans to reduce the parent company workforce by about 6,000 employees, over 10% of the 54,400 it had as of March 31, over the coming two to three years – but many will go into affiliates, where the deal is that the individual gets a nominal promotion, very important in status-conscious Japan, at the cost of a reduction in salary of as much as 30%. To cut costs, the company says that starting this fiscal, it will will transfer 700 to 800 people yearly to affiliated companies, an average increase of 20% from previous years. It will hire only 300 new graduates next April, and then only those with engineering degrees, down from 2,200 hired this April. It also expects about 2,000 employees a year to leave for retirement or, in the case of women, marriage. The news has not impressed analysts, who dislike the sleight of hand of shunting employees off into affiliates: There’s too much musical chairs and not enough actual reduction in force, Steve Myers, senior analyst at Jardine Fleming Securities told Reuter. They probably wanted to reduce numbers more, said Shigeru Yoshinaka, analyst at Barclays de Zoete Wedd Securities. If they transferred too many employees, it would be bad for morale. They are worried about opposition in the company. For fiscal 1993, the company reported a consolidated pretax loss of $150m, a 3% drop in computer equipment sales and a shocking 13.5% fall in orders.
