Chipmaker Renesas to cut 5,000 jobs

Japanese company to eliminate 12 percent of workforce worldwide, by offering incentives and early retirements to workers, as it aims to reduce losses following declining sales figures.

Renesas Electronics will cut more than 5,000 jobs, or 12 percent of its global workforce in a bid to trim losses.

The job cuts will be achieved through offering incentives and early retirements, and could save the company 43 billion yen (US$539 million) annually, the Japanese chipmaker said in a statement Tuesday. It may also close or sell up to 10 of its 18 domestic plants in three years.

The company will give the buyout offer to workers from Sep. 18 to Sep. 26 this year, and those who accept will have to leave by Oct. 31, the statement noted. 

Sales figures had declined in the fiscal year of 2011 due to the Japan earthquake, flooding in Thailand and sluggish world economy , causing Renesas to be un "urgent need" or business recovery, the statement revealed.

"In these circumstances, Renesas is further accelerating its moves to achieve more efficient production and strengthen its financial basis to enhance its profitable structure," the statement said. 

Renesas is not the only Japanese company that has been cutting jobs to reduce losses recently. Electronics giant Sony, in April, had announced plans to cut 10,000 jobs worldwide , as part of a massive restructuring to bring it back to profitability. IT vendor, NEC, also announced in January it will slash 10,000 jobs , to cut costs amid increasing market competition.