Renesas Said to Plan Cutting 5,400 Jobs in Bid to Boost Profits
Renesas Electronics Corp. (6723), the Japanese chip supplier to Apple Inc., is talking with unions to cut about 20 percent of its workforce through voluntary buyouts, according to a person familiar with the matter.
The company, which was bailed out by a state-backed fund, plans to eliminate about 5,400 jobs, with most reductions coming from administration rather than production, the person said, asking not to be identified because the the matter is private. The final number of buyouts may change depending on negotiations, and the company wants to conclude the reductions by March 2016, the person said.
“We are considering various options, including a plan on staffing to boost profitability, but nothing has been decided,” Taizo Endo, a spokesman for Renesas, said by phone. He declined to elaborate.
The Kawasaki, Japan-based maker of system LSI chips, used for functions including processing TV images, had 28,459 workers as of Sept. 30, according to data compiled by Bloomberg.
Renesas, which is 69 percent owned by Innovation Network Corp. of Japan., previously announced plans to eliminate more than 10,500 jobs as it seeks to become profitable. The supplier to Apple and Nintendo Co. (7974) was bailed out by INCJ last year as Japan’s chipmakers struggle amid falling demand and competition from Samsung Electronics Co.
The plan for Renesas to cut jobs was reported earlier today by Kyodo News.
Renesas was formed from the chip-making businesses of NEC Corp. (6701), Hitachi Ltd. (6501) and Mitsubishi Electric Corp. (6503) Those companies have a combined stake of about 23 percent, according to data compiled by Bloomberg.
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