There have been previous rumors indicating massive layoffs at Olympus. The company has now confirmed that it will be cutting its workforce by seven percent, in an effort to recoup from the crippling scandal it was involved in recently. Olympus will cut 2,700 employees from its global workforce by March 31, 2014, said the company.
The layoffs are part of a broader restructuring plan at Olympus, which could result in major changes across the company's global production sites, subsidiaries, and other divisions. The layoffs Olympus announced are slightly greater than rumored. Japanese news outlet Nikkei Business Daily reported last week that Olympus would cut roughly 2,500 jobs from its payroll. Previous reports from Japanese newspapers claimed the company is trying to impress investors that may be interested in a 10 percent equity stake in return for hundreds of millions of dollars, as Olympus is trying to raise some cash.
The Beginning of the End
Back in October, Olympus was involved in a huge scandal when its now-former president and CEO Michael Woodford presented documents to the media showing odd accounting practices, payouts, and other shady financial dealings the company was engaged in, as it tried to cover up its losses over more than a decade. When the scandal finally blew over, the alleged fraud was valued at roughly $1.7 billion, leaving Olympus in a dramatically unstable position.
The scandal, however, was far from over. In February Olympus found itself in another terrible situation, when seven people, including its former chairman and president Tsuyoshi Kikukawa, were arrested for their alleged ties to the scandal. The news of their arrest came just after Olympus scared off investors when it announced it would lose about $410 million this year.
Medium-Term Vision
In an effort to woo investors again, Olympus unveiled a "medium-term vision" on Friday, June 8, designed to accompany its workforce cuts. The company's vision includes regrouping its operation around its medical, imaging, and life science businesses, and focusing on the medical side. Moreover, Olympus also plans to consolidate 40 percent of its 30 production sites worldwide and ditch underperforming assets.
If all goes according to plan, the company expects its sales to rise from 920 billion yen ($11.6 billion) this fiscal year to 1.2 trillion yen ($12 billion) at the end of its fiscal year 2017. Olympus also aims to post a profit of 85 billion yen ($1.07 billion) by 2017.
