May 10, 2005 - Due to weakening digital camera sales, Olympus announced 30 percent of their camera division workforce will be cut. The Japanese camera-maker also posted a $111 million loss for the last fiscal year, in what could be just one part in a shakeout of the digital camera industry. Olympus announced that approximately 4,000 employees in its imaging division will see their jobs cut, part of a restructuring move that Olympus hopes will revive its faltering camera division.
Cutting personnel from the camera division, which employs roughly 14,000 worldwide, will be part of a larger cost-cutting effort that is expected to save the manufacturer $123 million by March of 2006. A majority of the manpower cuts will come from manufacturing plants in China. Olympus, like other camera manufacturers, is starting to see some softening in their camera sales and shipments throughout Japan and Asia.
Half of Olympus' annual sales come from its camera and imaging related divisions. Olympus has been struggling to revive its share in the digital camera market since they posted a $111 million loss for the fiscal year that ended in March and was replaced by Kodak as the world's number three camera manufacturer. The losses released this week were much higher than what Olympus had forecast late last month. Just a year ago, Olympus dropped unit prices by 17 percent as all digital camera prices plunged. The Japanese camera manufacturer also expects prices of their cameras to fall by three percent this current fiscal year.
Olympus is still shipping their cameras close to the volumes that they expected, with hopes of boosting the numbers of cameras available to consumers. While sales of digital cameras rose by 20 percent, or 8.9 million cameras over the last year, Olympus had hoped for sales of 9.5 million cameras. Looking to its domestic market, as well as other Asian countries like South Korea, Olympus is finding itself searching for buyers in a crowded and increasingly competitive, as well as cheaper, field.