Japan's Fujitsu pays £800M to cut deficit in UK subsidiaries' pension fund
The Japanese IT conglomerate said cutting the pension fund deficit will allow its UK subsidiaries to invest in growth
Fujitsu has paid £800 million (US$1.2 billion) into its pension funds for current and former U.K. employees, and renegotiated cuts to ongoing pension contributions, freeing up cash to grow other areas of its U.K. business, the company said Monday.
The Japanese conglomerate is known to many consumers for its computers, smartphones and other electronics. But it is also a major operator of data centers and provider of hosting services worldwide. The company's U.K. subsidiaries include systems, software, and e-commerce providers, as well as local offices of its electronics and components businesses.
The latest investment will help it expand more into the private sector, a company spokesman said, an area it has been focusing on for the last three years to complement its government contracts.
Together with previously negotiated cuts in annual contributions to the pension fund, the new investment will put the pensions on a stronger financial footing. Rich pension payouts for former employees can be a major drag on current profits, especially in weak economies.
The three pension funds affected by the investment have over 21,000 members.
Fujitsu has 14,000 employees in the U.K. and last year recruited over 1,800 new workers there, it said. The company said it invested nearly £50 million in the U.K. last year, including £14 million in research and development.
Fujitsu said in February that it aims for global revenues of ¥4.4 trillion (US$50 billion) in its fiscal year to the end of this month, but forecast a loss of ¥96 billion.
While the company has made a concerted effort to focus more on its infrastructure and server services in recent years, it remains one of Japan's biggest electronics manufacturers.
In smartphones, the company is vying with rivals Sharp and Apple for the top spot in its home country. Last month, Fujitsu said it would partner with French mobile operator Orange to offer its smartphone for the elderly in the country from June. The phone is the latest in the successful "Rakuraku" line sold under carrier NTT DoCoMo in Japan.