NEC to cut 10,000 jobs as Apple iPhone continues to gobble up Japan’s smartphone market

“NEC Corp said Thursday it will slash 10,000 jobs, almost one in 10 of its workers, in a bid to cut costs as competition from foreign rivals including Apple Inc pushes it deep into the red,” Nobuhiro Kubo reports for Reuters.

“NEC blamed its poor performance on weak demand for its smartphones amid the popularity of Apple’s iPhone in Japan, as well as on inroads by foreign rivals into the domestic IT infrastructure business and difficulty in expanding overseas,” Moyer reports. “It warned it would post a net loss of 100 billion yen ($1.3 billion) for the year to March 31, much bigger than its previous forecast of a 15 billion yen profit and a similar average estimate from eight analysts polled by Thomson Reuters I/B/E/S.”

Moyer reports, “It also slashed its projection for annual mobile phone sales by nearly a quarter to 5 million phones and most of the job cuts will be in its mobile phone business. Headcount will be reduced by the end of September and around 7,000 layoffs will be in Japan, Nobuhiro Endo said at a news conference in Tokyo.”

Read more in the full article here.

MacDailyNews Take: Here’s who is to blame for NEC’s woes: NEC. Not Apple. And, if you can cut 1 in 10 workers, and still stay in business, then you have far too many employees in the first place.

Good luck to those displaced workers. May they next work for a competent company that’s capable of competing.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


    1. Yeah, I was thinking how those smart tech reporters told us that Apple couldn’t hope to succeed in the Japanese smart phone market. Their phones carried network TV fer cryin’ out loud. 😉

      1. I remember it very well, indeed. It was claimed that Japanese feature phones were so much better suited for the Japanese with all those carriers offering all sorts of tiers of service. You had to practically be a genius to know what tiers of service to order to suit you and it came at quite a cost to the user.

        It’s surprising still since the Japanese are using NFC and eWallet hardware and software to buy everything from vending machines to railway passes which still isn’t available from Apple and the iPhone. Maybe those feature phones are falling out of favor since their UIs were rather complicated and varied from cellphone model to cellphone model and carrier to carrier. Many Japanese cellphones still have TV’s built into them but they suck batteries to death and reception isn’t always that good. I’d also heard costs had gone way up for those services. It’s a nice cool factor but in reality it’s probably just a pain for most.

        I’m just glad to find out that the know-it-all tech geniuses turned out to be rather stupid and that even the staid Japanese can make changes if there’s enough reason to. Go, Apple. I hope the iPhone penetrates deeply into the Japanese lifestyle.

        I’m not happy to hear about those employees losing their jobs, though. The days of life-long employment for the Japanese have been long gone ever since the economic bubble popped way back when.

        1. The lack of employment stability is becoming a problem. On the one hand it’s great to change things up now and then, and you’re not tied to a place you can’t stand. But if you’re cycling jobs every 2-4 years (the average in the tech industry), you’re wasting a lot time in interviews, preparing for them, and ramping up in a completely new environment, never mind periods of unemployment.

          Just an observation, not saying one (lifelong work at one company) is better than the current model, just because the old model worked in a different time.

  1. MDN’s take is silly. Foreign rivals eating your lunch and the shape of the economy in general is a perfectly valid reason/excuse for a company to be faltering. It’s like saying Microsoft’s monopolistic practices weren’t at least party to blame for Apple’s near-death experience in the 90s.

    Also, Apple in 1997 laid off 31% of its workforce during its darkest days–about 4100 full and part-time workers. Does that mean Apple had “too many employees”? The answer depends entirely on the time and situation. It was necessary for Apple in 1997, but Apple currently has over 60,000 employees, way more than they had back in 1997, it doesn’t mean they have too many employees now, does it?

    1. I would say that you are right and wrong.
      Yes, competition is competitive. But that is when its on a level playing field. Like how RIM is faltering because they just would not accept that the iPhone was the direction of the future.

      No, when a company has a monopoly and uses it illegally, like Microsoft (DOJ trial where they were found guilty) then you have a condition where the other company is really to blame. 🙂

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