Japanese electronics giant NEC Corp. said today that it will cut 20,000 workers worldwide in an attempt to stem a rising tide of losses from semiconductors and other businesses that have been hard hit by competition and the global economic slump.
NEC's net loss for October-December swelled to 130 billion yen (approx. $1.46 billion) from 5.2 billion yen a year earlier, it said today. Based in Tokyo, the company said it would also sink into the red for the full year through March.
The company hopes the job cuts, which will be split equally between Japan and overseas, will help save 80 billion yen over the next two years.
Additionally, a Japanese newspaper reported today that NEC was in talks with Toshiba Corp. to seek a possible chip alliance: Toshiba spinning off its system chip operations and incorporating them with NEC Electronics Corp., NEC's semiconductor unit.
NEC said that all of its operations faced difficulty, from information technology to mobile and electronic devices. Electronic parts and semiconductor operations took the worst beating, and sales fell almost 30 percent on declining demand for personal computers and displays.
The company is facing with a deepening global slump and escalating competition in the electronics industry, as well as a stronger yen, squeezing profits.