Significant Big Tech job cuts are turning the US into a key hiring ground for Hitachi, with the Japanese company saying it is eyeing “a big opportunity” and also looking for acquisitions in Silicon Valley and beyond.
In a Financial Times interview, chief executive Keiji Kojima said the fierce cost-cutting campaigns at Amazon, Meta, Alphabet, Microsoft and other US tech groups over the past year would help the industrial conglomerate as it goes on a multibillion-dollar recruitment spree to expand its digital services.
“It’s a tailwind for us,” Kojima said. “We want to hire really good people among those who were let go. Of course, we need to be very selective since the salaries for the people hired by those companies are generally high,” he added, describing it as “a big opportunity”.
Kojima said the company was also actively hunting new acquisition targets in the US in cloud services, following its $9.5bn purchase of GlobalLogic, a Silicon Valley software engineering company, in 2021.
Hitachi has set aside ¥500bn ($3.7bn) to invest in its digital strategy for the three years through March 2025 and plans to hire 30,000 people to work in that area. GlobalLogic is already hiring about 1,000 people every month, mainly in eastern Europe and Latin America, and has recently acquired two firms in Romania and Uruguay.
The aggressive spending plan follows a more than decade-long process in which the sprawling Japanese conglomerate has transitioned into an IT and infrastructure specialist, merging and selling off 22 listed subsidiaries long considered sacred cows.
Hitachi used cash raised from offloading non-core businesses to buy GlobalLogic and to expand its software business Lumada. It also spent $6.4bn to buy a nearly 80 per cent stake in ABB’s power grid business in 2020, which it later fully acquired.
“From here, we will be making investments to grow organically, but including M&A to accelerate that growth,” Kojima said, adding the company would also carry out share buybacks.
Hitachi’s chief said “the conglomerate discount” often applied to sprawling Japanese companies had narrowed as a result of its corporate restructuring efforts.
In its latest divestiture, Kojima said the group planned to sell a stake to a global private equity fund in Hitachi Astemo, which was created through a landmark merger of car parts subsidiaries at Hitachi and Honda. The unit, two-thirds of which is owned by Hitachi, will aim to list its shares in the next two to three years after seeking a fund investor in fiscal 2023.
“With electric cars now in full swing around the world, the company will not be able to survive without further capital investment and research and development,” he said.