Seiko Epson to Book 46.3 Bln Yen for Cost-Cut Plan
March
06– Seiko Epson Corp., the world’s second-biggest printer maker, will
book 46.3 billion yen ($393 million) for restructuring costs this
fiscal year as the company eliminates jobs and cuts production lines at
its chip unit.
The
company will book a further 3 billion yen in the next business year
ending March 31, 2007, President Seiji Hanaoka said at a media
conference in Tokyo today. Suwa, Nagano-based Seiko Epson made the
projections as part of its mid-term business plan.
Seiko Epson is
planning to cut its workforce in Japan by 11 percent over three years
and slim down some of its factories as prices of semiconductors and
flat-panel displays fall. Sales of printer ink and paper fell more than
expected this year on increased competition from Canon Inc. and
Hewlett-Packard Co.
The restructuring plan will help add 64 billion yen to the company’s net income by March 2009, Hanaoka said.
The
company, which also makes cell-phone displays and chips, yesterday
widened its full-year net loss forecast by 64 percent to 23 billion
yen, citing a charge to write down the value of assets at a chip
factory. The company reported a 55.7 billion profit a year ago. It kept
sales, operating income and pretax profit forecasts for this fiscal
year.
Seiko Epson said in January it would eliminate 3,000 jobs in
Japan over the next three years and book at least 42 billion yen to
reflect declines in the value of assets in its electronics device unit.
Today, the company said it eliminate about 100 jobs at its European
office equipment operations.
Three-Year Plan
Sales in the next
three years are expected to rise 7.5 percent to 1.67 trillion yen,
Hanaoka said. For the next fiscal year starting April 1, sales will
reach 1.59 trillion yen.
The electronic devices unit, including cell
phone displays and LCD chips, is projected to post an operating profit
of 15 billion yen for the year ending March 2008, compared with a
forecast for a 1 billion yen loss next fiscal year.
Operating
profit, or sales minus the cost of goods sold and administrative
expenses, for the unit is expected to rise to 25 billion yen in the
year ending March 2009.