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Fujitsu: Dumping older workers will wipe out quarter of forecast profit

Japanese giant tries its own digital transformation, 50-something staff aren't wanted

Fujitsu has warned investors its full-year profits will fall 23.6 per cent below previous forecasts because it's extended an offer for older workers to leave in favor of youngsters more likely to deliver the DX, or "digital experience," customers demand.

A Tuesday announcement was uncommonly blunt about the Japanese giant's intentions, stating: "As part of its human resources initiatives to strengthen its status as a DX company, Fujitsu will temporarily expand its 'Self-Produce Support System' to support employees seeking career course redirection outside of the Fujitsu Group."

Only staffers aged 50 or over are eligible for the offer of "career course redirection." Fujitsu says 3,031 people have already applied for the scheme as of February 28. Most are executives or workers who have been rehired after already retiring once.

The hit to the bottom line will be substantial: on January 7, the company forecast ¥275 billion ($2.4bn) operating profit on ¥3,630 trillion ($31.4bn) annual revenue. Revenue hasn't changed in the new forecast, though predicted profit is now ¥210 billion ($1.8bn), down $600m.

A second announcement, which The Register has translated from Japanese, explains that changing customer demand means Fujitsu needs new people with new attitudes. Sales people, for example, will be asked to become "business producers who are responsible for creating new businesses in cross-industry [and] play a central role in accelerating the conversion of companies to digital transformation."

Over 2,000 other internal staff have already moved to new jobs that also address digital transformation.

Japan has an ageing population. That has created a labor shortage that, ironically, sees older workers urged to stay in the workforce. Fujitsu offering such workers an off-ramp is therefore significant.

Fujitsu hopes to replenish its ranks with graduates – a plan that has problems. For starters, sourcing 101 suggests that one should not let service providers send in the kids. Within Japan, Fujitsu has also earned itself a reputation as just not being a go-to company for agile digital action – a notion epitomized by the nation's new digital transformation agency taking the unusual decision to choose AWS and Google rather than local suppliers to help with its plans to reform government processes that remain dependent on paper, faxes, and officials stamping documents.

Fujitsu is not alone in deciding its aging staff might not be up to the digital age: IBM is currently the subject of numerous age discrimination lawsuits, one of which surfaced documents in which Big Blue managers allegedly described older workers as "Dinobabies" and planned to correct its "seniority mix" by making more "Early Professional Hires."

At least Fujitsu is being up front about its plans and their financial impact – but not the human cost. ®

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