NEC Corp, Hitachi Ltd and Fujitsu Ltd said they will hire more software engineers in a bid to tap a US$64 billion market for computer services in Japan that analysts expect to grow as much as 9 percent this year.
All three are all hiring at their information service divisions, which support computer users. NEC is adding 1,000 software engineers and sales staff in the six months ending next March, Hitachi hopes to add 2,300 by March 2003 and Fujitsu plans to add 5,000 by March 2004.
The companies, which are trimming manufacturing jobs amid a computer industry slump, are shifting emphasis from hardware production to services as computer and chip prices fall. Worldwide personal-computer shipments dropped in the second quarter from the year-ago period for the first time since 1986.
"This is an inevitable move," said Yoshihide Ohtake, a Tsubasa Research Institute Ltd analyst. "Japanese companies can't make profits manufacturing" in competition with Asian rivals whose labor costs are lower, he said.
The information service divisions make customized software, fix glitches and provide other services as more Japanese companies use computers in their businesses.
Sales of services to computer-related businesses in Japan will probably rise between 7 percent and 9 percent this year, said Satoshi Yamanoi, an analyst at market researcher Dataquest, a unit of Gartner Inc. Such sales totaled ?7.6 trillion (US$64.8 billion) last year, up from ?7 trillion in 1999.
NEC's push to add 1,000 computer-system engineers in its fiscal second half is an "emergency step" to serve the system-integration market, which is "growing rapidly," said spokesman Yasuhito Jouchi.
The hirings would boost NEC group's system engineers by 7.1 percent to 15,000, he said. They also come as NEC, Japan's biggest PC maker, braces for more bad news after the terrorist attacks in the US earlier this month.
"The terrorist attacks will have a slight impact on our earnings," spokesman Daniel Mathieson said in an interview.
Hitachi's addition of 2,300 would increase its system engineering and sales staff by 4.9 percent to 49,300, said spokesman Hiroaki Oh.
"The industry is shifting emphasis to solutions and services, and Hitachi is taking that strategy too," he said.
Fujitsu plans to have 40,000 system engineers by March 2004, an increase of about 14 percent from the present 35,000, said spokesman Eisuke Sato.
Chip companies have jumped into the same sectors in the past, such as DRAM chips -- the main memory in computers -- and flash memory chips used in mobile phones, resulting in overcapacity that has kept them from making decent profits, he said. The spot market price of memory chips has dropped 75 percent this year.
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