2012.06.08 10:45:07 Olympus To Cut About 2,700 Jobs By March 2014

TOKYO--Olympus Corp. (7733.TO) said Friday it will cut its global workforce by around 7% in two years and streamline non-core operations to bolster its finances following a $1.5 billion accounting scandal that has left it with a razor-thin capital cushion. The Japanese maker of cameras and medical-imaging equipment is also considering various measures to raise fresh capital, including equity tie-ups and the issuance of new shares, its president said. "We did not think it would take this long," to decide on a capital-raising plan, Hiroyuki Sasa said at a news conference to announce the company's medium-term business plan. "Right now, we are seriously studying (the equity tie-up offers) at full speed," he said, adding that the company is considering factors including synergies with Olypmus's core business and whether the firm can maintain its independence. The company has been exploring ways to restore its balance sheet after its shareholder equity was cut by three-fourths when it restated its earnings in December to account for investment losses it had been hiding for more than a decade. Its capital adequacy ratio stood at 4.6% at the end of March, compared with 11% a year earlier. "It is an extremely grave situation," Mr. Sasa said. The company needs to prepare for contingencies such as the yen's appreciation, deterioration in the European crisis and a rise in liability costs, he said. In its medium-term plan through the fiscal year ending in March 2017, Olympus said it aims to raise its net profit to Y85 billion and its capital adequacy ratio to 30% or more, partly by expanding its endoscope business in emerging markets. For the current fiscal year, it expects to return to the black with a Y7 billion net profit against a year-earlier loss of Y48.99 billion. In addition to cutting around 2,700 jobs, Olympus also said it will consolidate and realign around 40% of its 30 manufacturing bases worldwide and shut down its plant in the Philippines. Restructuring costs are expected to total around Y15 billion over five years, Mr. Sasa said. Despite the scandal, Olympus's 70% share in the market for endoscopes remains strong--making the company an attractive tie-up prospect for consumer electronics makers looking for new growth opportunities in the healthcare business. Mr. Sasa said the company has received proposals for capital tie-ups other than those from Panasonic Corp. (6752.TO), Sony Corp. (6758.TO), Fujifilm Holdings Corp. (4901.TO) and Terumo Corp. (4543.TO), which were earlier reported by the media. The offers do not include any proposals from foreign companies, he added. Mr. Sasa said the company is open to forming equity tie-ups with several firms. Write to Kana Inagaki at kana.inagaki@dowjones.com (END) Dow Jones Newswires June 08, 2012 02:45 ET (06:45 GMT)