Technology group Fujitsu-Siemens Computers has joined the ranks of several other multinationals, whose local operations are cutting costs to weather the global economic downturn.
Fujitsu Siemens local MD Idris Suleman confirms the company is downsizing, among other measures, to achieve cost reduction targets handed down by head office.
Suleman says Germany issued a directive in December for the group's global operations to cut operating costs by up to 30% per region.
The local operation has already achieved a reduction of about 15%, says Suleman, adding that the company was relying on retirement and voluntary retrenchment to shed employees. So far, four of its 80 employees - 5% of the local workforce - have left the company.
“We are extending the retrenchment period for another few weeks and we are hoping for another one or two employees to leave,” says Suleman. Failing this, the company may turn to laying off workers involuntarily.
“Basically, we are looking at natural attrition to downsize our workforce. We stopped employing people about a year ago, also as per instruction from Germany.”
As part of the company's “lean and mean for 2009” strategy, Suleman says the local business has streamlined its operations wherever it could. It has already moved premises in Cape Town and Durban, where it is now saving a substantial amount of money.
Also, the company has cut down on general expenses, such as travel, where it is now relying more heavily on teleconferencing. Suleman also says the local office has slashed its training and marketing budgets.
The company will submit to its final budget to head office in the last week of March and Suleman believes a 20% reduction in operating costs is the maximum the local business can achieve.
Meanwhile, Fujitsu will acquire Siemens' 50% share in the Fujitsu Siemens joint venture, effective from 1 April. The joint venture was established on 1 October 1999.
Both partners have cited strategic reasons for Siemens' withdrawal from the partnership - a move that will see Fujitsu splashing out 450 million euros for the Siemens stake.
While the brand is expected to change, sources have indicated the company will continue operating on a “business as usual” basis.
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