NEC to Cut 10,000 Jobs on Forecast of Third Loss

NEC Corp., forecasting its third annual loss in four years, will cut 10,000 jobs as slower global growth reduces demand for its mobile phones, computers and wireless gear.

“As macroeconomic concerns about Europe and developing countries increase, we decided to invest limited resources in lesser business segments,” President Nobuhiro Endo said today in Tokyo.

NEC forecast a 100 billion-yen loss ($1.3 billion) for the year ending March 31, abandoning a previous outlook for a 15 billion-yen profit, the Tokyo-based company said in a statement today. The job cuts equal about 8.6 percent of NEC’s workforce.

About 7,000 of those jobs will be eliminated in Japan, and NEC will take a 40 billion-yen charge for the restructuring, according to the statement. NEC also won’t pay a year-end dividend.

“The job cuts announced today are bigger than expected,” said Yuichi Ishida, an analyst at Mizuho Investors Securities Co. in Tokyo. “This will probably help the company reduce expenses, and we’ll probably see some improvements immediately from next fiscal year.”