Taisugar to lay off 2,500 employees early next year

Dec 12, 2003 Ι Industry In-Focus Ι General Items Ι By Judy, CENS
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Taipei, Dec. 12, 2003 (CENS)--To enhance its operational efficiency, the state-run Taiwan Sugar Corporation (Taisugar) is going to reshape its organization and slash its workforce by 2,500 people early next year.

The company is reportedly to start cutting its workforce after the Chinese New Year, which falls on Jan. 21 of 2004, and the size of the cut estimated at 45% of the firm's total staff. Total severance and retirement payment is estimated to amount to NT$9 billion (US$264.71 million at US$1 = NT$34).

Wu Nai-jen, chairman of the company, said after slashing 2,500 employees Taisugar is expected to save personnel cost of NT$3.75 billion (US$110.29 million) per year. He said currently the company has a total of 5,500 employees and their average annual salary is around NT$1.5 million (US$44,118) per person, much higher than that of most private firms. The personnel cost of the company's best-performance retail store normally accounts for 9% of the store's total operating cost, which is obviously higher than the corresponding average ratio of 6% recorded by similar private retail stores.

In June of 2002, Taisugar already appropriated NT$6 billion (US$176.47 million) to for retirement payments to 1,449 voluntary retirees. Wu believed there is still room to trim the size of the payroll. He noted, in addition to employees on the payroll, the company offers some 3,800 contracted job opportunities at its retail chain stores and gas stations. Wu will not rule out giving the projected 2,500 voluntary retirees a priority to take such contracted jobs.

Although Taisugar is actively trimming its workforce, the company is planning to divide the company into eight business departments, including wholesaling, oil products, refined agriculture, biotechnology, animal and marine raising, merchandise marketing, sugar, and leisure business. In addition, the company also determined to set up three business centers in charge of land development, agricultural produce, and real estate management.

Wu disclosed that Taisugar gained revenue of NT$30.3 billion (US$891.2 million) last year, suffering a loss of NT$1.97 billion (US$57.9 million) for its operations. However, with an income of NT$4.2 billion (US$123.53 million) from land sales, the company's red ink then turned blue, with pretax profits of NT$2.2 billion (US$64.7 million) last year.

In the first 10 months of this year, Taisugar saw revenue of NT$24.3 billion (US$714.7 million), with pretax loss of NT$2.29 billion (US$67.44 million). In the same period, the company scored non-operating income of NT$1.63 billion (US$47.8 million), making the firm's overall loss for the period narrow to NT$668 million (US$19.65 million).
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