Renesas to eliminate more than 3,000 jobs

Renesas Electronics Corp., the ailing Japanese chipmaker, plans to cut more than 3,000 additional jobs as it prepares to raise at least 150 billion yen ($1.7 billion) from a government-backed fund and customers.

Renesas began talks with labor unions Thursday and plans to eliminate the positions through buyouts by Sept. 30, the Kawasaki-based company said in a statement. No upper limit for buyout applications has been set, and the impact on earnings hasn’t been determined, Renesas said.

The reduction adds to about 7,500 positions cut through a buyout program in October, taking the planned job losses to about 25 percent of Renesas’s workforce. The supplier to Apple Inc. and Nintendo Co. agreed to sell new shares to a group led by Innovation Network Corp. of Japan last month to raise funds as Japan’s chipmakers struggle amid falling demand, a strong yen and competition from Samsung Electronics Co.

“The downside risk for Renesas shares may be limited for now with this restructuring,” said Takashi Oba, a senior strategist at Okasan Securities Co. “Renesas must start to show evidence of a recovery, such as posting an operating profit, and concentrate on its strengths.”

Renesas, which employed 41,900 people as of September, fell 1 percent to 288 yen at 9:55 a.m. in Tokyo trading. The stock was headed for the lowest close since Dec. 3. Japan’s benchmark Nikkei 225 Stock Average gained 0.5 percent. 

(Bloomberg)