Hitachi Ltd has become the latest of the Japanese electronics giants to fall foul of the economic decline in South East Asia. It has drastically revised its fiscal forecast downwards, intends to cut 4,000 of its 66,000 staff by the year 2000 and is canceling its dividend. The company is now forecasting a 100bn yen ($0.74bn) loss for fiscal 1998 down from an expected profit of 30bn yen ($0.22bn). The company also intends to cut its costs by 10% by 2000 through a freeze on capital spending and cutting R&D costs. The company blamed the downturn on the state of the 64Mb DRAM market and the slow development of the LSI market. Lower prices and a lack of demand in the PC and consumer electronics sectors also hit the company hard. The company says that it expects the staff cuts to mainly be achieved through attrition. However, Hitachi has already announced a restructuring of its American operations that will result in the loss of 650 staff in all. The company will stop production at its Irving, Texas plant – which was producing increasingly uncompetitive 4Mb DRAM chips with 500 workers being laid off. In addition, Hitachi will merge its American subsidiaries – Hitachi Semiconductor (America) Inc and Hitachi Microsystems Inc, the company said in a statement, to focus on the design and marketing of large-scale integrated semiconductor systems – such as Hitachi’s SuperH RISC series. The merger will leave to a further 150 lay-offs. The Nihon Keizai Shimbun reports that Hitachi is to spin off its domestic consumer electronics plants within a year, a move that is expected to lead to the loss of a further 500 jobs.
