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September 29, 1998

HITACHI REORGANIZATION TO PUSH SOFTWARE SERVICES

By CBR Staff Writer

Hitachi Ltd, which issued a profit warning and promised job cuts earlier this month (CI No 3,489), is to refocus on it software services business with a large scale consolidation of separate units, according to reports from Tokyo. Hitachi is set to review its business and consolidate affiliated companies into a single software services unit, according to Nikkei Watcher on IT Business. The result will be a software services business of approximately 20,000 staff, with revenues equivalent to $4.75bn, the news services reported. Hitachi hopes the move will both save it money and help it compete with the services businesses of IBM Corp and Fujitsu Ltd. The consolidation could involve the combination of the current 9,000 people Information Systems Group with Hitachi Software Engineering Co (4,400 staff), Hitachi Information Systems Ltd (3,600 staff) and Hitachi System Engineering Ltd (2,000 staff). The hardware side of the Information Systems Group might be used as the basis for a new company, merged with other affiliates, said the report. Other options include the acquisition of large or mid-sized service companies in the US or Europe.

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