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Fuji Fire Plans JYP3.5b Cost Cutting

By reducing its employee headcount

Osaka-based Fuji Fire & Marine Insurance, whose major shareholder is American International Group, plans to reduce its additional JYP3.5 billion by eliminating jobs and limiting new hires – reported Bloomberg.

Akira Kondo, chief executive officer, said that the company intends to reduce its employee base through attrition to counter declining demand for insurance, and the job elimination is expected to start in April 1, 2010.

As of March 31, 2009, the company has approximately 6,800 full-time employees. Previously, the company revealed a cost-reduction plan of approximately JYP7 billion.

Mr. Kondo, 64, who in June became head of the insurer in which AIG holds more than a combined 40% stake, said: “The current cost-cutting plan still isn’t enough. It’s not a commitment we have made officially as a firm to cut additional costs, but it is my expectation to do so.”

Mr. Kondo continued that the company would reach the JYP7 billion in cost cuts a year earlier than expected, partially by selling its Tokyo office and cutting bonuses. In February 2010, the company informed that it would lower its employee base by 600.