Olympus cuts 2,700 jobs; pays Woodford £10m; focuses on mirrorless (update includes whistleblower comment)
This graphic, released as part of Olympus's five-year business plan statement, makes clear that the firm plans to focus away from DSLRs
[NEWS UPDATE: Michael Woodford, who has won a confirmed £10m payout from the company, says the firm has a ‘bright future' – see his statement below.]
Olympus says it will cut around 7% of its global workforce by 31 March 2014 as part of an ‘aggressive' cost-cutting strategy.
This will involve ‘elimination and consolidation' of 30 production sites (around 40%), and the firm plans to ‘restructure' its imaging manufacturing functions.
In a ‘medium-term vision' statement, released today, the company adds: ‘In the imaging business we will review our product line-up by allocating management resources with a focus on mirrorless interchangeable-lens cameras and high-end compact cameras, while improving profitability.'
The statement indicates that Olympus will move away from DSLRs. 'The top two companies [Canon and Nikon] dominate in terms of market share, brand strength and development capability.'
Asked whether Olympus plans to develop any more DSLRs, a spokesperson for Olympus's Tokyo HQ told Amateur Photographer: 'Olympus will continue to sell E-series.'
As part of the restructure, Olympus says it will not focus on 'low-end' compacts, on grounds that these deliver 'low-profit' potential in its mature markets.
Olympus says it will ‘strive' to ensure its imaging business breaks into profit by ‘March 2013'.
As yet, there is no official word on whether the group will form a strategic alliance with another company, as has been reported.
'Unfortunately, we cannot say when we will make any announcement,' added the Olympus spokesperson.
However, Olympus admits it needs to improve shareholders' equity ratio, to at least 30% by March 2017 - an indication, say analysts, that it may have to raise capital.
The Tokyo-based camera and medical equipment maker has also pledged to 'enhance the efficiency of the indirect workforce at headquarters and in each business domain'.
Meanwhile, Olympus has confirmed it has reached a 1.245 billion yen settlement with accounting scandal whistleblower Michael Woodford, admitting that it was in the company's ‘best interest' to strike a deal before an employment tribunal action.
Olympus said it feared it may have had to pay escalating lawsuit costs if it had not settled out of court, relating to a ‘series of disputes' with Woodford (pictured below) who was sacked in October 2011.
The former CEO said: ‘In today's settlement between myself and the company, we reached a fair and amicable agreement and I would like to take this opportunity to wish the new board well in taking Olympus forward.'
Woodford added: ‘It is a wonderful company, with wonderful products and people, and has a bright future ahead of it.'
Unveiling its 'Back to Basics', five-year, business strategy the Olympus statement adds: 'The company aims to return to the basic values it had at founding and make a fresh start in order to regain credibility of its stakeholders, build itself anew and create new corporate value.'
At the height of the accounting scandal the firm's share value dropped by nearly 80%.
Michael Woodford will be paid £10m, Olympus has confirmed
Picture credit: C Cheesman