600 jobs lost at NEC's Scottish chip plant

The economic slowdown continues to hit jobs with NEC becoming the latest tech firm to cut jobs north of the border

Scotland was a victim of the tech slump once again when NEC announced on Tuesday that it planned to cut 600 jobs from a factory in West Lothian.

The chip maker confirmed fears that its restructuring efforts would include job losses from the plant, based in Livingston. Faced with a big drop in demand for its semiconductors, NEC has decided to cut wafer production from 28,000 per month to 15,000.

This is despite investing at least £80m in the factory last year to enable it to make a range of new products.

Union leaders, who had feared that 800 employees could have been axed, were hopeful that many of those affected could find other work. However, Scotland has already seen recent job cuts in the tech sector, with Motorola's Bathgate manufacturing plant closing only last week. NEC's announcement shows that although Britain is not officially in recession, it is vulnerable to the US slowdown -- which some analysts warn is now spreading round the globe.

The chips made at the Livingston factory are primarily used within mobile phones. The mobile sector has recently been hit by a substantial drop in demand for handsets, and all the major manufacturers have lowered their forecasts for mobile phone sales.

Back in April NEC said that it would halt the production of DRAM chips at Livingston by March 2003, and shift to more profitable products. At the time it insisted that the move would not involve any job losses.

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