Photo/Illutration The logo of Omron Corp. (Asahi Shimbun file photo)

China’s economic stagnation is forcing control system manufacturer Omron Corp. to slash 2,000 jobs in Japan and overseas.

The company announced Feb. 26 it will seek voluntary retirement of about 1,000 domestic employees, or nearly 10 percent of its group workforce in Japan, in spring.

It also plans around 1,000 job cuts overseas by September.

“While our dependence on China increased, we failed to create new businesses to drive our growth,” President Junta Tsujinaga told investors Feb. 26.

He pledged “to build a labor cost structure that is resilient to a rapidly changing business environment.”

Omron, based in Kyoto, derives about 50 percent of its sales from control equipment business, such as factory automation robots.

The company focused heavily on the vast Chinese market, but its key customers, namely semiconductor and battery makers, recently refrained from making substantial investments in plant and equipment due to the country’s economic slump.

In the nine months through December, overall operating profits nosedived 63.5 percent from a year earlier to 26.5 billion yen ($176 million) on sales of 607.9 billion yen, down 4.7 percent.

Net profits plunged 84.5 percent year on year to 7.8 billion yen.

The company said it will promote restructuring over 18 months from April to turn its operations around.

It plans to squeeze fixed costs by 30 billion yen through job cuts and other measures and strengthen U.S. and European businesses to break dependence on China.

The voluntary retirement program in April and May will apply to regular employees aged 40 or older who have worked for the company for three years or longer.

Applicants are to leave the company as of July 20. They will be eligible for a retirement allowance plus an additional payout.

Employees at nine subsidiaries are excluded, including Omron Taiyo Co., where many people with disabilities work.

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