Monday, March 20, 2006
Restructuring at Seiko Epson Corporation will lead to a dramatic reduction of its ailing displays and semiconductors divisions as well as a narrower range of printers. The moves are expected to save $544 million over the next three years.
Earlier this year, the Japanese printer specialist said it would eliminate 3,000 jobs due to the fierce competition for ink-jet printers, its mainstay business.
Semiconductor operations would be “drastically slimmed by consolidating and reorganizing production lines to the point where the business can turn a profit even without sales growth," the company said in a statement.
"By making the entire operation leaner and more agile, the company intends to give the business a wider variety of future options," it said.
Seiko Epson will book Yen 46.3 billion ($395 million) in restructuring costs in its current fiscal year, and a further Yen 3 billion the following year.
The company said it expects prices of displays to continue their downward trend, but plans to shift to smaller sized panels next year, where it says margins will improve, in an effort to stem losses. Investments will go towards extra capacity for smaller panels that serve the mobile phones and digital cameras sectors.
By: DocMemory
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