Olympus, hit by a $1.7 billion fraud scandal, plans to shed 2,500 workers and sell an equity stake to either Sony or Panasonic in an attempt to bolster its finances, local media report.

Olympus, the world’s leading maker of diagnostic endoscopes, is struggling to recover from an accounting fraud uncovered last year by its then chief, Michael Woodford. It was forced to correct years of accounts, leaving its balance sheet badly weakened.

The job losses, equal to about 7 per cent of its total workforce, will come mainly from Olympus’s loss-making camera business and by consolidating its overseas plants, the Nikkei business daily said. They would be revealed on June 8th, it added.

Sony and Panasonic are the leading contenders to pump fresh equity in Olympus, the Asahi newspaper said, adding that the successful suitor would invest several hundreds of millions of dollars for a stake of more than 10 per cent. That decision is expected by the end of June, it reported.

Investors in Sony and Panasonic, both struggling to turn their own businesses around after reporting record losses, gave the reports a cold reception yesterday. – (Reuters)