Tech giants NEC, Hitachi announce 27,000 job cuts

High-tech giants NEC and Hitachi said on Friday they were cutting up to 27,000 jobs as Japan Inc. buckles under the strain of the global economic crisis.

NEC Corp. said it was slashing 20,000 jobs worldwide by March 2010 - half of them regular workers - as it sinks deeper into the red. About 40 percent will be in Japan and the rest overseas, NEC president Kaoru Yano told a press conference.

Hitachi Ltd. said it would shed up to 7,000 jobs as it forecast a net loss of 700 billion yen ($7.8 billion) in the current financial year to March. It will try to move full-time workers around within the company to minimise job losses, company president Kazuo Furukawa said.

"We will take various measures but may not be able to avoid cutting some regular workers," he said.

NEC announced the job losses after saying it expects a net loss of 290 billion yen ($3.2 billion) in the year to March as recessions in major economies from Japan to Europe and the United States hammer demand.

"It is regrettable that we have to announce such a big downgrade," Yano said. "We must cut waste."

Computer maker Fujitsu Ltd. said its net losses ballooned to 36.1 billion yen ($403 million) in the nine months to December, and forecast it would end the year to March in the red.

"I have absolutely no confidence in the fiscal year 2009," Fujitsu chief financial officer Kazuhiko Kato told reporters. "I have no clue what the outlook will be."

Japan is in the midst of its first recession in seven years as the global slowdown saps demand overseas for cars, computers, cameras and other key exports.

A slew of gloomy economic data released on Friday suggested the recession is deepening, with factory output falling a record 9.6 percent in December.

Japanese companies have also been hit hard by a strong yen, which recently soared to a 13-year high against the
Layoffs dollar.

There was more bad news from the car industry as Honda Motor Co. reported that its net profit dived 89 percent to 20.24 billion yen in the fiscal third quarter as car sales slumped.

All Nippon Airways meanwhile said it expects an annual net loss of nine billion yen -- its first in six years -- as travel to North America and Europe declines due to the global economic crisis.

There was also fresh misery in the banking sector as Mizuho Financial Group posted a net loss of 50.55 billion yen in the nine months to December due to the global financial crisis.

Mizuho has been badly hit by financial market turmoil and losses on toxic mortgage-backed securities. A year earlier it had made a net profit of 393.03 billion yen.

The group downgraded its outlook but still hopes to end the current financial year to March in the black. It expects a net profit of 100 billion yen, down from an earlier projection of 250 billion yen.

"The dislocation of the global financial markets stemming from US subprime issues has worsened with the failure of Lehman Brothers in September 2008 and has caused an economic downturn on a global scale," it said in a statement.

"As a result, the economic situation in and outside of Japan has been deteriorating rapidly."

Agencies