NEC to cut nearly 10% of its workforce

Japanese technology giant NEC has announced plan to cut 10,000 jobs and predicted a ¥100 billion (£830 million) loss for the current financial year. It had previously forcast a ¥15 billion (£125 million) profit.

NEC, whose various business lines include telecommunications equipment as well as IT and network services, blamed "drastic changes" to the Japanese market and poor smartphone sales for its dismal quarter. The company’s business was also impacted by flooding in Thailand, which crippled its supply of hard disks, it said.

Some of the projected loss will come through one-off charges resulting from the restructuring, NEC said, adding that it expected the £328 million of charges to be clawed back the next year in savings.

Most of jobs (7,000) will be cut in Japan, with a further 3,000 overseas, as the company slashes at its unprofitable smartphone business and focuses on enterprise offerings. NEC said it would focus on IT services, its Japanese carrier network and "social infrastructure", all of which were profit generators for NEC in the last financial year.

In IT services, it said it would invest in its private cloud and virtualisation business, as well proposing solutions for national identification in Japan and emerging economies, and disaster relief via its social infrastructure business.

In 2010, NEC announced that plans to invest ¥100 billion in cloud computing.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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