Fujitsu has recently implemented cost-cutting measures in response to challenges it is facing, particularly in light of its involvement in the Post Office Horizon scandal.
As part of these measures, UK staff were informed before the holidays about significant cuts to spending on travel, recruitment, social events, and external organizations.
The impact of the Horizon scandal on Fujitsu has been substantial. Following the airing of ITV’s dramatization of the scandal in January 2024, the company agreed to halt bidding for new public sector contracts until the public inquiry into the scandal concludes.
In its most recent financial report for the 12-month period ending in March 2024, Fujitsu reported a loss of over £170 million, compared to a loss of £99 million in the previous year. This financial statement covers a period that includes the company’s decision to stop pursuing public sector contracts, indicating that the situation could potentially worsen.
Sales have continued to decline, and Fujitsu may also be required to contribute to compensating victims of the scandal for which it shares responsibility.
In a statement to Companies House, Fujitsu acknowledged the uncertainty regarding the extent of reputational and financial risks until the inquiry concludes and publishes its findings. The company anticipates engaging with the UK government to discuss contributing to compensation schemes based on the inquiry’s outcomes.
One of the key risks highlighted by Fujitsu is the potential loss of future business due to reputational damage stemming from the Horizon inquiry, which could significantly impact the company’s business plans.
To mitigate these challenges, the company’s UK management team has circulated a memo to employees outlining measures to reduce costs. This includes avoiding domestic travel for internal meetings and events, prioritizing internal hires over external recruitment, and reviewing current contractors with the aim of replacing them with internal staff where possible.
Furthermore, Fujitsu is implementing stricter controls on spending with external companies, requiring preapproval from the UK leadership team for expenditures above a certain threshold. The company is also encouraging staff to postpone team social events until after the new financial year begins on 31 March.
