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. Last Updated: 07/27/2016

Mitsubishi to Shed 9,000 Staff




TOKYO -- Its profits slashed by slumping sales, Mitsubishi Motors Corp. said Tuesday it will cut 9,900 more jobs in the next five years, trimming its work force by 11 percent from last year.


The announcement from the ailing Japanese automaker, which did not specify what types of workers will be cut, or where, comes amid restructuring among other top Japanese companies, including Nissan Motor Co., now 37 percent owned by France's Renault SA.


Analysts said the job cuts were necessary to ensure Mitsubishi's comeback.


"Mitsubishi is undergoing restructuring at home and in the unprofitable operations abroad, so job cuts were definitely inevitable,'' said Noriyuki Matsushima, auto analyst for Nikko Salomon Smith Barney in Tokyo.


Faced with poor sales in Japan and the rest of Asia, Mitsubishi posted its first-ever earnings loss on a group basis in the fiscal year ending March 31, 1998. The company then began restructuring, and Mitsubishi rebounded to a slight profit the following fiscal year.


The job cuts are part of that restructuring plan. Mitsubishi Motors' total group work force will be reduced to 78,900 employees from 88,800 last year, by March 2004. In fiscal 1998 alone, the company cut 2,500 jobs.


The reductions will be achieved mainly through attrition, including hiring fewer people and encouraging early retirement. Earlier this month, Mitsubishi Motors announced it was forging an alliance with Sweden's Volvo AB in an effort to strengthen its truck business. In that agreement, Volvo will buy a 5 percent stake in Mitsubishi, while Mitsubishi will buy up to 5 percent of Volvo by the end of 2002.


The deal is part of a wave of increasing foreign involvement in Japan's auto sector, which is striving to become more globallycompetitive.


Nissan has said it will trim 21,000 employees worldwide, or about 14 percent of its group work force, although it has also promised not to resort to massive layoffs.


Japanese corporations have long boasted a lifetime employment system, in which workers are virtually never fired, although they must work loyally for the same employer without switching jobs.


Mass layoffs, typical in Western-style restructuring, are extremely rare in Japan. Even decisions to trim workers through attrition, up to now, have tended to set off a social backlash.