Japanese electronics maker Hitachi Ltd. said Thursday it will close a factory in Mexico and shed about 4,400 jobs as part of a global overhaul of its slumping hard disk drive business.
The plant in Guadalajara will be shuttered by the middle of next year and its production of HDD components shifted to an existing plant in Laguna, Philippines, the company said in a news release.
Hard disk drives are used in mobile phones, laptops and other consumer electronics.
The change will help Hitachi save nearly $300 million over the next five years by bringing component manufacturing closer to the company's final assembly plants in Thailand and China, Hitachi said.
Under the plan, Tokyo-based Hitachi will cut its global work force of 40,000 by 11 percent.
Hitachi is among Japanese electronics makers that had reported a gradual recovery after suffering a slump when the prices of electronics products plunged and cheaper Asian rivals began to gain global market share.
But the company, the world's third-largest supplier of hard disk drives, is again struggling against faster-moving rivals in the industry.
Hitachi has been losing ground in the disk drive business. That contributed to a 77 percent tumble in its net profit in the October-December quarter.
Thursday's announcement is aimed at streamlining production to better compete. The overhaul will shorten product production cycles and cut shipping costs, Hitachi said.
The news helped lift Hitachi's shares 5.4 percent to 899 yen ($7.68) on the Tokyo Stock Exchange on Thursday.
source:www.chron.com
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