Nikon to lay off 1,000 employees to stay profitable

Nikon has announced a reorganization that will see the loss of a thousand jobs. The measure is intended to ensure that the company remains profitable in the future. In the quarter, Nikon made more profit, but sold fewer products.

Most jobs disappear at the Semiconductor branch; Nikon talks about ‘rationalizing and re-filling’ 1000 jobs. The Imaging branch involves 350 jobs and the head offices are looking at filling 200 jobs. Not all jobs will disappear, but after the reorganization 1000 employees will have left the company. Nikon had 25,729 employees as of March, according to its annual report.

The reorganization will cost a one-time 48 billion yen, but should result in annual savings of 20 billion yen from the next financial year. Converted that is about 175 million euros. Nikon will no longer attempt to achieve higher sales after the reorganization, but will focus on continued profitability. The camera division will do this, among other things, by focusing on high-end products, which have a higher margin.

According to Nikon, the reorganization is necessary because the previously set objectives were not achieved. For example, the Semiconductor branch of the company did not meet the profitability threshold, and the Imaging division is struggling with a shrinking camera market and the consequences of a high exchange rate. Furthermore, growth markets are not achieving the growth that was initially expected.

The reorganization was announced simultaneously with the announcement of the quarterly figures. Financially, these figures paint a positive picture. Nikon posted revenue that was 13.8 percent higher and profits were 55.9 percent higher than in the comparable quarter last year. However, Nikon is seeing sales decline as a result of a shrinking camera market.

In the first half of the fiscal year, Nikon sold 1.4 million interchangeable-lens cameras and sold 2 million lenses. Last year, that was 2 million cameras and 2.8 million lenses in the same time frame. The market for compact cameras is declining even more sharply. Nikon sold 1.4 million in the past two quarters; a year earlier that was 3.1 million.