Feeds

NEC to axe 20,000

The meltdown is turning Japanese

Secure remote control for conventional and virtual desktops

NEC joined the parade of tech firms announcing sinking profits, downsized forecasts, and shrinking workforces when the company today released financial results for its most recent quarter.

Today's financial results detailed the nine-month period of April through December 2008. Compared with the same period in 2007, revenue fell 3.7 per cent, from ¥3.19 trillion ($35.8bn, £25.1bn) to ¥3.08 trillion ($34.7bn, £24.3bn) in 2008.

While that drop may not look too worrisome, income figures tell a more troubling story. Operating income dropped from ¥43.4bn ($485m, £341m) in the black in 2007 to ¥11.4bn ($127m, £85m) in the red in 2008.

Sales for the particularly melty last three months of 2008 suffered more than during the rest of the nine-month period, with a decline of 9.9 per cent from ¥1.05 trillion ($11.8bn, £8.3bn) in the same period in 2007 to ¥948.3bn ($10.6bn, £7.4bn) in 2008.

The company also revised its October 2008 sales forecast for their full fiscal year ending in March 2009, down from ¥4.6 trillion ($51.4bn, £36.1bn) to ¥4.2 trillion ($46.9bn, £33bn), which will be a 9 per cent drop from their previous fiscal year, during which NEC brought in ¥4.617 trillion ($51.6bn, £36.2bn).

Operating losses are now projected to be ¥30bn ($335m, £235m) for the full fiscal year, and not the positive income of ¥156.8bn ($1.8bn, £1.23bn) anticipated by the October forecast.

The new projection shows income losses across the board - a 31.2 per cent slide in mobile and personal products, a 49.6 per cent drop in IT and networking, and a hefty 84.4 per cent nosedive in "electron devices," aka chips.

With these numbers staring them in the face, NEC has chosen to shrink its workforce, as well - by a lot.

NEC president Kaoru Yano, NEC's president, said today about the job cuts that "We are aiming for 20,000 or more," and that about half of that number would be full-timers.

Cutting that many people from your payroll is a time-consuming process, especially in a country like Japan, which has traditionally protected its workforce with strict job-security laws.

That said, those laws have been relaxed in the last decade, so much so that Yano estimates that he can send the full 20,000 packing by March 2010 - which, not coincidentally, will mark the end of the company's next fiscal year.

And it can't have made NEC workers who fear they may be among the unlucky 20,000 feel all warm and cuddly to have heard Yano's description of them.

"We must cut waste," the president of the struggling tech giant said.

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Fast And Furious 6 cammer thrown in slammer for nearly three years
Man jailed for dodgy cinema recording of Hollywood movie
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Scale data protection with your virtual environment
To scale at the rate of virtualization growth, data protection solutions need to adopt new capabilities and simplify current features.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?