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Fujitsu Limited

Fujitsu Unveils Plans for Restructuring and New Growth Strategy

Tokyo, August 20, 2001--- Fujitsu Limited today announced that it has designated fiscal year 2001 as the "Year of Thorough Structural Reform" for the Fujitsu Group and will push forward with new reform initiatives as we enter the broadband Internet era. Leveraging its uniquely wide range of strengths in Information Technology, Fujitsu will strive to provide optimal solutions to enterprises and society in the era of the broadband Internet, by focusing its efforts on developing and delivering high-performance/high-reliability products and high value-added services.

1. Market conditions and operating environment

Although the IT segment is expected to show the highest growth among industries in the mid-term, the current situation is very severe. With the continuing worldwide curtailment of corporate IT investment and stagnant personal demand, a gradual U-shaped recovery of the market is likely to begin in 2002 or later.

2. A new growth strategy for Fujitsu

Under these circumstances, Fujitsu will speed up reforms for the current fiscal year in order to enhance growth, taking the initial step toward bringing about "New Technologies and New Businesses for the Future," from a mid-term perspective. The following three objectives are given priority:
  1. Implementing a growth strategy driven by software and services
  2. Putting greater emphasis on core technology and products
  3. Strengthening our competitiveness on a Group-wide basis
3. Details of restructuring expenses (extraordinary losses)

In order to put in place a new growth strategy for the Fujitsu Group, this year the company will carry out structural reform of our operations at an overall cost of 300 billion yen (as mentioned in the July 27th forecast for this year's financial results). The particulars of the costs for each business group are summarized below.
  1. Information Processing Group (80 billion yen)
    1. Strengthen core businesses         30 billion yen
    2. Selection and concentration of independent businesses   50 billion yen
  2. Telecommunications Group (45 billion yen)
    1. Strengthen core businesses         45 billion yen
  3. Electronic Devices Group (145 billion yen)
    1. Strengthen core businesses         125 billion yen
    2. Selection and concentration of independent businesses   20 billion yen
  4. Services and Software Group (30 billion yen)
    1. Strengthen core businesses          30 billion yen
Further details for each Group can be found on a separate attachment.

4. Personnel adjustments accompanying structural reform

In conjunction with the current restructuring, staff reductions totaling 16,400 people (11,400 overseas and 5,000 in Japan, including reductions at suppliers) will be made. Taking into account personnel shifts, a total of 21,100 people will be affected.

Overview of personnel adjustments (21,100 people)
  Overseas (including previous reductions)     11,400 people
  Japan9,700 people

  Japan-related adjustments (9,700 people)
    - Strengthening sales and SE1,400 people
    - Strengthening manufacturing capability2,100 people
    - Starting separate companies to utilize special skills     1,200 people
    - Attrition2,500 people
    - Reductions at suppliers/subcontractors2,500 people

5. Reduction of fixed expenses

By undertaking these structural reforms, Fujitsu will reduce fixed expenses by 100 billion yen annually, making it possible for the company to turn a profit even under non-growth circumstances.

6. Financial targets for fiscal year 2003

Building on the implementation of the policies outlined above, Fujitsu will make utmost efforts to achieve the following targets:
  - Operating profit400 billion yen
  - Reducing inventories by half     500 billion yen
  - Return on equity10%
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About Fujitsu
Fujitsu is a leading provider of Internet-focused information technology solutions for the global marketplace. Its pace-setting technologies, best-in-class computing and telecommunications platforms, and worldwide corps of systems and services experts make it uniquely positioned to unleash the infinite possibilities of the Internet to help its customers succeed. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 5.48 trillion yen for the fiscal year ended March 31, 2001.

Press contacts:
 Yuri Momomoto, Scott Ikeda
 Fujitsu Limited, Public Relations
 Tel: +81-3-3215-5259 (Tokyo)
 Fax: +81-3-3216-9365
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