NTT to cut 17,000 jobs

Japan's top telecommunications company, NTT, says it will shed nearly 8% of its work force and cut interest-bearing debt under a new three-year plan to revive its business.

The overhaul calls for 17,000 job cuts - 7.8% of its staff - to around 199,000, a withdrawal from unprofitable ventures and the sale of properties and healthy subsidiaries by March 2005.

The company also said it is considering buying back its own shares for the first time.

NTT has been under intense government pressure to streamline its operations and lower interconnection rates it charges other telecom companies that use its fixed telephone lines.

High fixed-line rates have been blamed for the slow spread of the Internet here.

Japan's decade-long economic downturn has hurt many of the nation's biggest companies, forcing them to curb costs and fire thousands of workers. The job cuts have sent the nation's unemployment rate to record highs.

NTT's finances are a shambles.

The company has said it expects a net loss of 865bn (€7.46bn) for the fiscal year ended March 31, far worse than its earlier forecast.

That projected loss exceeds the record 684.3bn yen (€5.9bn) net loss reported by Nissan in 2000, before the auto maker staged a stunning turnaround. NTT will announce earnings for the latest fiscal year in May.

The telecom giant's cost-cutting steps are expected to lower its capital spending by 400bn yen (€3.45bn) to 2.2tln yen (€20bn) in the three-year period, and reduce debt by 1.3tln yen (€11bn) to 6.4tln yen (€55bn).

That should boost revenues by as much as 800bn yen (€6.9bn) to 12.6tln yen (€108bn) by March 2005, allowing the company to turn a profit, it said.

As part of its plan, NTT will halt investments in fixed-line telephone networks, funneling money to developing new internet protocol technology, and will push into business consulting and retail energy markets.