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NEC president falls on his sword after huge losses

Biggest ever financial hit sees top man join the 15,000 NEC staff who've lost their jobs

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NEC saw its president resign in the wake of 15,000 job cuts after the Japanese concern’s biggest financial loss in its history. The cuts have started at the top, with president Hisashi Kaneko one of the first to go. Speaking in Tokyo, Kaneko said he would resign and take responsibility for the IT giant’s expected Y150 billion ($1.25 billion)consolidated net loss to 31 March. The losses were partly a result of restructuring costs incurred by NEC’s Packard-Bell unit. They included NEC incurring a special loss of around Y75 billion to pay for the overhaul of the PC manufacturing unit. NEC, which this year marks its centenary, announced an overall restructuring plan to cut expenses, unprofitable business and 15,000 jobs over a three-year period. More than two thirds of those job cuts have already taken place. NEC said efforts had been hampered by falling demand for telecommunications kit in the home, weak semiconductor prices and a strong yen, as well as the general state of the industry. "With our restructuring efforts and the reshuffling of top management, we hope to create a revitalised NEC," said Kaneko. NEC also said it would buy Packard-Bell’s European operation for around $450 million. Kaneko’s resignation will be effective from 31 March. His shoes will be filled by NEC executive vice president Koji Nishigaki. Kaneko managed to retain his post as president last year through the scandal which saw ex-NEC chairman Tadahiro Sekimoto stand down over NEC’s involvement in contract paddling. Although Sekimoto was not implicated, he resigned after three NEC officials were indicted for questionable dealings with the Japanese Defence Agency. See earlier story. ®

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