The Channel logo

News

By | Phil Muncaster 26th January 2012 17:26

NEC slashes 10,000 jobs – blames Thai floods, smartphone slump

Japanese IT giant a victim of Apple's success

NEC is set to slash 10,000 jobs including 3,000 unlucky employees from its workforce outside of Japan, after its revised forecast revealed the Japanese electronics giant would make a year end net loss of ¥100bn (£820m).

The firm did not reveal exactly where in the business the jobs would go, and said the overseas cuts would be made “in accordance with the review of manufacturing operation”. However, its financial forecast document (PDF) reveals some clues.

It shows a Mobile Terminal Business in dire straits, with smartphone shipments revised down for the year from 6.5 million to 5 million units and delays to the expansion of its overseas business. The success of “foreign vendors' increasing market share in Japan” was also noted, no doubt a reference to the huge impact the iPhone has made in the land of the rising sun.

NEC has also been hit hard by the flooding in Thailand, which virtually submerged two key components factories and strangled its supply of hard disk drives.

It's not the first tech firm to admit it has been affected either, with EMC, Dell, HP and Microsoft all blaming the natural disaster for poor financials and price hikes recently.

As a result, NEC was forced to issue a revised forecast for the fiscal year end which saw put sales at ¥3,1 trillion, ¥150bn less than the previous forecast, and operating and normal income both reduced by ¥20bn yen.

Aside from the job cuts, NEC will also focus investment on the three areas of the business that are actually doing ok: IT services, carrier networks and ‘social infrastructure’, which includes things like digital broadcasting technology and disaster prevention systems.

In doing so, future plans include expanding the LTE, services and smart infrastructure businesses internationally. ®

comment icon Read 3 comments on this article alert Send corrections

Opinion

Privacy image

Frank Jennings

Two working parties, ministers galore... but data transfer law remains in limbo
EMC_Unity_bezel

Chris Evans

It does simplify the hardware setup, whatever it is
A microscopic view of the biometric shark skin. Pic: James Weaver

Chris Mellor

Do something and stop faffing about in the bush league

Kat Hall

International system in general needs greater transparency

Features

Nerd fail photo via Shutterstock
Shouting match
Single market vs. rest of the world
hacker
Mostly it's financial crime. Here's what all the cool kids' terms mean in English
Apple logo. Pic: Blake Patterson
Plenty of bumps in the 40-year road for Mac makers