Fuji Heavy Industries Ltd. said Tuesday that its net profit in the first half of fiscal 2005 declined 3.8 percent to 8 billion yen and announced it will cut its domestic workforce by 5 percent, or 700 workers, by the end of January.

The cuts, which will affect workers over age 45 mainly at the parent firm, will be the first for the maker of Subaru cars since it was established in 1953.

Fuji Heavy plans to slash about 7 billion yen in annual costs through the job cuts beginning in fiscal 2006,