According to a new report, Olympus is trying to recoup after a massive scandal and is now planning layoffs and a possible equity sale. Japanese news outlet Nikkei Business Daily reported that Olympus plans to drop 2,500 jobs from its payroll, i.e. roughly seven percent of its total workforce. The layoffs will come mainly from Olympus' camera business and by consolidating its overseas plants, said the publication.
Moreover, Japanese papers reported on Wednesday, May 30, that Olympus hopes to sell part of its business to fellow Japanese tech companies Panasonic or Sony, in an effort to raise some money, according to Reuters. The company is reportedly prepared to trade about 10 percent of equity in exchange for hundreds of millions of dollars.
Olympus fell into a downward spiral back in October when it fired president and CEO Michael Woodford, amid a scandal with documents presented to the media. The documents showed Olympus had been trying to cover up its losses for more than a decade, engaging in shady accounting practices, payouts, and other odd financial dealings. After the scandal finally started to blow over, the alleged fraud was estimated at roughly $1.7 billion.
In February, Olympus found itself in an even bigger mess when seven people, including former chairman and president Tsuyoshi Kikukawa, were arrested. To top it all, the news of their arrest came shortly after Olympus scared off investors by announcing it would lose about $410 million this year.
With this new strategy, Olympus hopes to cut costs and raise some cash to keep its operation floating, at a somewhat stable state. Sony and Panasonic are the top contenders to invest in Olympus, reported the Asahi newspaper, according to Reuters. The successful contender would reportedly invest hundreds of millions of dollars for a more than 10 percent stake in the company.
On the other hand, Sony and Panasonic are not exactly on a roll either. Sony is currently restructuring its operation and is laying off 10,000 people, and with a newly appointed CEO it is still figuring out its way onward. Meanwhile, Panasonic is reportedly cutting 3,500 jobs in its headquarters, also part of a restructuring plan.
