Scandal-hit Japanese camera and medical equipment maker Olympus said on Friday it will cut about seven per cent of its workforce – and eke out a small profit this year – as it tries to recover from a loss cover-up scandal.
The firm’s balance sheet deteriorated, with a loss of JPY48.99 billion (US$618 million) in the fiscal year through March, after its British former chief executive blew the whistle last year over US$1.7 billion worth of losses the company had moved off its balance sheet.
Olympus also said it would earn a JPY7.0 billion net profit in the current business year, while the 2,700 job cuts would be ushered in by 2014.
“Around 2,700 employees, or about seven per cent of the number of global employees as of March 2012, will be lost by March 2014,” it said in a statement.
The firm has almost 40,000 employees worldwide.
Olympus also said it would consolidate its global manufacturing base by 40 per cent, while aiming to book a net profit of JPY40 billion for the fiscal year from March 2014 and JPY85 billion in the business year from March 2016.
The revelations by former Olympus head Michael Woodford triggered international criminal investigations and lawsuits from investors.
The firm initially denied allegations it had used past acquisitions and outsized consultant fees to hide huge losses dating back to the 1990s, but eventually admitted wrongdoing.
In March, the company and three former senior executives – including ex-president Tsuyoshi Kikukawa – were charged over their role in the scandal.