Japanese technology giant NEC Corp. announced it plans to cut 20,000 positions worldwide starting in April. Half the layoffs will be full-time positions. The company, a provider of network, IT and identity management systems, also plans to exit the liquid-crystal display business.
NEC said it expects losses in its mobile handset business, Electron Devices chip unit, and a group of smaller businesses, including charges associated with the layoffs.
Most of the cuts will come from NEC's chip, electronic-component and LCD divisions. About 60 per cent of the job eliminations will take place in overseas units, NEC president Kaoru Yano said.
According the company's web site, NEC and its more than 300 subsidiaries employ approximately 150,000. Several of NEC Corp.'s subsidiaries are in Silicon Valley, including Santa Clara-based NEC Electronics America, San Jose-based NEC Tokin America Inc. and Cupertino-based NEC FiberOpTech Inc. NEC Laboratories America has an office in Cupertino.
"The worsening financial environment resulted in decreased exports to developed countries and low consumption, thereby contributing to the spread of a simultaneous worldwide recession," the company said in a statement. NEC also said the strong yen contributed to its financial woes.
For the fiscal third quarter ended 31 December, NEC said its net loss soared to 130 billion yen, or $1.45 billion, from 5.2 billion yen, or $57.8 million, during the same period a year ago. Revenues for the quarter fell nearly 10 per cent to 948 billion yen, or $10.5 billion, from 1.05 trillion yen, or $11.7 billion.
The company lowered its forecast for the full fiscal year that runs through March to a net loss of 290 billion yen, or $3.2 billion. The company had forecast in October a net profit of 15 billion yen, or $166.8 million. The company also cuts its sales forecast to 4.2 trillion yen, or $46.7 billion, from 4.6 trillion yen, or $51.2 billion.