TDK to reduce workforce by 8,800

TOKYO: TDK Corp, the world's biggest maker of magnetic heads for hard-disk

drives, said on Friday it would cut its global workforce by 24 per cent, or

8,800 people, by March 2004.

Facing sharply lower sales and profit, TDK has been trying to cut costs to

meet its targets for the current 2001/02 business year, which started in April.

TDK would cut 2,300 jobs in Japan and 6,500 jobs overseas by the end of the

2003/04 business year, a company spokesman said. TDK had a workforce of 37,000

at the end of March.

Of the cuts in Japan, 1,200 to 1,300 will come from 11 factories in Akita

prefecture and the rest will come from various parts of the company. Of the cuts

overseas, 1,500 have already been implemented with a further 3,000 to come from

Asia and 2,000 from the United States.

The workforce reductions will be implemented through retirement, early

retirement and letting contract workers go. The cuts come as electronics

companies struggle to cope with declining demand for electronic parts amid a

global slowdown in the information technology sector.

In August, major electronic parts maker Kyocera Corp said it would reduce its

workforce, focusing the cuts on its overseas subsidiaries. The company did not

specify a number, but Japanese daily Yomiuri Shimbun has said Kyocera would cut

10,000 jobs, or 20 per cent of its staff, by the end of the year.

Although TDK posted a group operating profit for the April-June quarter of

2.59 billion yen, which was 86.5 per cent lower than in the previous year, the

company said it was facing a loss in the second quarter.

For the full year to March 2002, TDK in August revised its outlook to a group

operating profit of 30 billion yen from an original estimate of 40 billion. The

late afternoon news gave a boost to TDK shares, which closed 10.04 per cent

higher at 5,480 yen while the Nikkei 225 average was flat.

But TDK is down 50.7 per cent so far this year, while the Nikkei is down 25.9

per cent.

(C) Reuters Limited 2001.