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Ricoh to Cut 10,000 Jobs, May Triple Profit in Three Years

A man cycles past the Ricoh Co. headquarters in Tokyo, Japan, on Wednesday, April 19, 2007. Photographer: Tomohiro Ohsumi/Bloomberg News
A man cycles past the Ricoh Co. headquarters in Tokyo, Japan, on Wednesday, April 19, 2007. Photographer: Tomohiro Ohsumi/Bloomberg News

May 26 (Bloomberg) -- Ricoh Co., the Japanese office-equipment maker, plans to cut 9 percent of its workforce over the next three years to revive profit growth amid falling sales. The stock rose the most in more than two months.

The company plans to take measures including cutting 10,000 workers and consolidating factories by the year ending March 2014, it said in a statement today. Tokyo-based Ricoh said it expects the steps will cost 60 billion yen ($733 million) by next fiscal year and boost its operating profit by 140 billion yen in three years.

Sales at Ricoh slipped for the past three years partly because of a stronger yen and after the March 11 earthquake in northeastern Japan damaged its facilities. The company aims to improve its operating profit margin to at least 8.8 percent in three years from 3.1 percent last fiscal year.

“We need to make the painful reforms” to recover earnings, President Shiro Kondo said at a press conference in Tokyo. “The quake had a big impact on us, as most of our major plants in Japan are concentrated in the northeast.”

Ricoh rose 4.1 percent to 885 yen at the 3 p.m. close on the Tokyo Stock Exchange, the biggest gain since March 22.

Sales Target

The company has set a target of 210 billion yen in operating profit and sales of at least 2.4 trillion yen in the year ending March 2014, it said. That compares with profit of 60.2 billion yen on sales of 1.94 trillion yen that Ricoh reported last fiscal year. Ricoh based its earnings goals on exchange rates of 85 yen against the dollar and 120 yen per euro.

Ricoh also plans to reassign 15,000 workers to growth areas as part of the plan announced today. It had 109,000 employees, including 40,100 in Japan, as of March 31, the company said in April.

The number of workers increased by 30,000 in the past three years through overseas acquisitions, Kondo said. He declined to say where the company plans to cut jobs.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Yoshinori Eki in Tokyo at yeki@bloomberg.net

To contact the editors responsible for this story: Frank Longid at flongid@bloomberg.net; Young-Sam Cho at ycho2@bloomberg.net

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