Hitachi to lay off 14,700 employees

August 31, 2001 – Tokyo, Japan – Hitachi, Ltd. today announced that the Company is implementing emergency management measures aimed at bringing about an early improvement in its business results.

Comprehensive emergency measures include:

Personnel reductions: On a consolidated basis, in addition to natural attrition, the number of employees will be reduced by around 14,700 (10,200 in Japan and 4,500 overseas) by the end of FY01, mainly through restructuring of the Semiconductor Group and Display Group.

Comprehensive cutting of fixed costs: On an unconsolidated basis, targets for cutting fixed costs will be set for each business group to reduce the overall level of fixed costs by 60 billion yen by the end of fiscal 2001, the year ending March 31, 2002. In subsidiaries belonging to segments where results are particularly sluggish, such as Electronic Devices and High Functional Materials & Components, manufacturing facilities will be closed, merged or downsized. On a consolidated basis, fixed costs reduction target is set around 130 billion yen.

Top-to-bottom review of planned investment in plant and equipment: In response to a rapid deterioration in the operating environment, plant and equipment investment plans will be reviewed to reduce investment items to the minimum required. In the semiconductor business in which supply greatly exceeds demand, the initially-planned investment of 140 billion yen will be decreased to 60 billion yen in an effort to further prevent cash flow deterioration.

Hitachi has been working to achieve the goals of its “i.e. HITACHI” medium-term business plan through restructuring moves and management reforms implemented under a new management system launched in April 1999. However, with rapid changes in the market environment leading to a worsening of the company’s business results, Hitachi is implementing emergency management measures aimed at bringing about an early improvement in its business results.

Starting from the second half of the current fiscal year, Hitachi Group head-office function will be strengthened and a new Future Inspiration Value (FIV) index being devised by the company will be used to re-evaluate the company’s business portfolio in terms of new segment units. Based on the outcome of this re-evaluation, the form the Hitachi Group should take will be defined, business strategies will be rigorously reviewed and operations will be resolutely reorganized.


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