NEC Corp, the Japanese computer maker that formed a venture with Lenovo Group Ltd (聯想) last year, will cut 10,000 jobs, about 8.6 percent of its work force, after forecasting a third annual loss in four years.
NEC will eliminate about 7,000 jobs in Japan and take a ￥40 billion (US$516 million) charge to cover the cost of restructuring and job cuts, the Tokyo-based company said in a statement yesterday.
The other 3,000 job eliminations will be from operations outside Japan.
The cuts will begin as early as March 31, NEC president Nobuhiro Endo told reporters in Tokyo yesterday.
The computer manufacturer forecast a ￥100 billion annual loss, compared with a previous outlook for a profit of ￥15 billion, as slower growth globally and in Japan trimmed demand, according to the statement.
It revised its sales forecast for the full year downward to ￥3.1 trillion, a 0.5 percent drop from the previous fiscal year, as “challenging business conditions continue”.
NEC was unchanged at ￥168 as of the 3pm close of trading in Tokyo, compared with a 0.4 percent decline for the benchmark Nikkei 225 Stock Average. The shares lost 36 percent last year compared with a 29 percent drop for rival Japanese computer maker Fujitsu Ltd.
NEC won’t pay a year-end dividend, according to the statement.
The company said the job losses would cost it ￥40 billion this fiscal year, but were expected to generate savings of well more than that amount in the following two years.
It would open a new capacitor factory in Thailand after its current plant suffered “serious damage” in last year’s floods, it added.
The Tokyo-based company had 115,840 employees at the end of March last year, compared with 154,786 in fiscal year 2007, according to data compiled by Bloomberg.
Net loss widened to ￥86.5 billion in the three months ended Dec. 31, from ￥26.5 billion a year earlier. Sales fell 6.7 percent to ￥672 billion.
Last year, Lenovo, China’s biggest personal computer maker, agreed to invest US$175 million to form a venture with NEC to expand in Japan.