Loss-making NEC to cut 10,000 jobs | india | Hindustan Times
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Loss-making NEC to cut 10,000 jobs

india Updated: Jan 26, 2012 18:00 IST

Japanese electronics giant NEC said Thursday it would axe 10,000 jobs worldwide, as it announced losses for the past nine months had almost doubled.

In a presentation accompanying its third-quarter results it said it was projecting a loss of 100 billion yen ($1.3 billion) for the financial year ending in March 2012 and would not be paying a dividend.

It said it would reduce headcount by 7,000 in Japan and 3,000 overseas.

The company said the job losses would cost it 40 billion yen this financial year, but were expected to generate savings of well over that amount in the following two years. The changes were to bring about "restructuring in businesses that require immediate reform", it said, and would give it a "business structure with high profitability".

NEC, which provides technology services and makes computers and electronic devices, said its mobile phone business had suffered from "drastic changes in (the) Japanese market", with foreign vendors' market share increasing.

It posted a net loss of 97.5 billion yen for the nine months to December, compared with a 53.6 billion yen loss in the corresponding period a year previously.

NEC revised its sales forecast for the full year downward to 3.1 trillion yen, a 0.5 percent drop on the previous year, as "challenging business conditions continue".

It specifically cited global reductions in investment spending, reduced mobile phone shipments, and the impact of last year's floods in Thailand.

The company had previously projected a 15 billion yen net profit for the current financial year but revised that to a 100 billion yen net loss, even though it would make an operating profit of 70 billion yen.

It blamed "business restructuring costs for the reform of cost structure, and an increase in income taxes" and said that "regrettably" it was revising its year-end dividend forecast to "none".

Before the results were released NEC shares closed unchanged at 168 yen on the Tokyo stock exchange.