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NEC announces 20,000 job losses

Financial crisis hits Japanese giant

As part of cost-cutting measures, NEC will lay-off up to 20,000 employees. The company also revealed it will close a number of factories and consider withdrawing from some business areas.

The company, one of Japan's biggest electrical and electronics companies, will lay off 9,500 staff in Japan, look to early retirement for a further 450 domestic staff and cut 9,000 workers in its operations in other countries.

NEC did not announce details of where the layoffs will hit and which divisions will be closed, but it said it will pursue "substantial reform" at its chip-making subsidiary NEC Electronics.

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NEC had been hoping to make a $166m net profit in its current financial year, which runs until March, but is now expecting a net loss of $3.2bn due to poorer than expected business, writedowns on investments and the restructuring. It expects sales for the full year of $46bn, which if realised would be a nine percent drop on actual sales in the previous year.

In the last three months of 2008, NEC's fiscal third quarter, the company recorded a loss of $1.4bn on sales of $10.5bn. In the same period a year earlier it lost just $55m on sales of $12bn.

Results in its information technology and network systems business were mostly in line with expectations but the mobile phone handset and semiconductor units suffered due to a drop in demand. The strong Japanese yen also hurt profits from overseas business.

See also: NEC ExpEther boosts PCI Express up to 2km

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