Japan's Fujifilm Holdings Corp said on Wednesday it plans to shift its remaining digital camera production to China and cut an unspecified number of jobs as it restructures its struggling camera operations.
Fujifilm also said it would outsource production of charge coupled devices (CCDs), which are image-capturing chips used in digital cameras, to Toshiba Corp, dissolve a subsidiary and sell land and buildings to electronics parts maker Murata Manufacturing Co.
The camera business restructuring follows a major overhaul of its photographic film operations last year in which it cut 5,000 jobs, or about 7 percent of its global workforce.
The digital camera business has remained a weak spot, and it only broke even on an operating basis in the past business year ended in March as it struggled to keep up with price competition from larger rivals such as Canon Inc
To boost efficiency, Fujifilm said it would stop mass producing digital cameras in Japan and shift its remaining output to China, where it has already transferred 80 percent of its in-house production in a bid to lower costs.
It plans to continue development and back-end processing of CCDs after front-end production goes out to Toshiba.
The aim is to lower fixed costs and boost efficiency, said Fujifilm spokesman Tatsuo Suzuki.
Fujifilm plans to dissolve Fujifilm Photonix Co, a wholly owned subsidiary in Miyagi Prefecture, Japan, that employs about 700 workers. It will also sell related land and buildings in Miyagi to Murata Manufacturing.
About 200 Fujifilm Photonix employees will be transferred to a new unit that will handle after-sales services and back-end production, such as assembly and testing, of CCDs.
Suzuki said the fate of the remaining employees was not yet decided, though it planned to implement an early retirement scheme. He did not say how many workers would be targeted in the scheme.
Fujifilm, the world's seventh-largest digital camera maker in 2006, has struggled to carve out a lucrative niche for itself in the market.
It does not have the economies of scale of the larger players and lacks a major presence in digital single lens reflex (SLR) models, a high-end and high-margin segment of the market dominated by Canon and Nikon Corp.
But in a sign of strong market demand, Fujifilm tweaked its digital camera sales forecast higher for the business year to March 2008 to 8 million from 7.8 million units. Fujfilm sold 6.6 million digital cameras in the past business year.