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Fujitsu says 1,800 UK job cuts needed to boost ailing margins

Unite: £86.5m profits makes pre-Christmas axe wielding unnecessary

Fujitsu’s plans to axe 1,800 jobs in the UK despite making £86.5m in profit last year is a necessary boost to margins which are “significantly below market expectation” – the firm’s UK and Ireland chair Michael Keegan has said.

The Unite union announced fresh strike action at the firm’s Manchester site today to coincide with the Fujitsu Forum trade fair in Munich.

Up to 2,500 employees received letters informing them their jobs were at risk yesterday – just six weeks before Christmas. Speaking to The Register at the event, Keegan said the plan to cut 3,300 jobs across Europe was necessary if the firm is to remain competitive.

The business is also “re-employing” 1,200 people in digital, internet of things, and security roles.

He said: “I think this is never an easy subject to address. The truth is that the IT market is massively being transformed. We are moving to new skills and new businesses, while old businesses are in decline.

“What we know about Fujitsu is our return on shareholders is running at approximately half the rate of our competitors, so we are not as profitable as other companies we benchmark ourselves against and we need to transform ourself.”

He added: “I think the investor community has seen our announcements, and seen the stock price going up. And I think a lot of analysts have said Fujitsu is taking the right action. Action that companies like HP and Cisco have taken for years. Fujitsu is doing the right thing to remain a big global integrator.”

The Unite union has pointed out that the UK made £86.5m in profits, making the current cuts unnecessary.

Keegan said: “Our president has said our return on sales should be 10 per cent. So if you look at our UK revenue of £1.7bn – you can do the maths.”

One Fujitsu staffer got in touch with The Register to say they felt misled by management over the cuts, as the company had previously said there would be no headcount reductions.

Keegan said that while that may have been true 18 months ago, the business has since had to cast a more critical eye over its balance sheet. He did not rule out further cuts down the line.

“We will have to assess these things as we go. I don’t think I can gaze into a crystal ball and say for sure. It will all depend on the performance of the business as we go. I very much hope it won’t. But that will be dependent on our performance as a business.”

The Unite organised strike is also intended to highlight a 16 per cent gender pay gap at the firm. Keegan said the company takes the issue of pay disparity seriously and is crunching its own data over the next 12 months to identify to what extent a pay gap may exist.

“In terms of our gender pay policies, we recognise and I think the whole IT industry recognises, that there is a gender imbalance in terms of pay. Fujitsu understands that is something that needs to be addressed. We are collecting our data and are looking to see how we can have equal pay for equal work.”

Keegan said he has been an advocate of getting more women into IT for some time. “In the IT industry as a whole women are about 19 per cent. At Fujitsu we are 25 per cent. Better than the average industry sector. But for me we need to be 30 per cent by 2020. But we should be aiming for higher than that – we should be aiming for 50/50.” ®

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