February 06, 2009, 9:12 AM — NEC is planning to withdraw from the European enterprise PC market in the middle of this year as part of its attempts to stem losses, Japan's Nikkei newspaper reported on Friday.
The company will end PC production at its NEC Computer SAS subsidiary in France then reduce operations at the factory and switch to server-related items, the newspaper said quoting "company sources." NEC has already started negotiations with the unit's 420 staff, according to the report.
The move will mean a pull-back from the entire EMEA region and reduce NEC's PC business to only Japan, the newspaper said.
NEC declined to comment on the report.
Last week NEC sharply revised down its financial outlook for the current fiscal year and said it plans to cut 20,000 workers worldwide. Around 60 percent of the layoffs will be outside Japan.
In the year to the end of March it expects net losses of ¥290 billion against a previously anticipated profit of ¥15 billion. Sales are expected to be ¥4.2 trillion, which if realized would be a 9 percent drop on actual sales in the previous year.
Fujitsu, NEC's biggest competitor in the Japanese PC market, is also shaking up its European PC operations. In November it announced plans to pay approximately €450 million (US$575 million) for the 50 percent stake it doesn't own in Fujitsu Siemens Computers. The deal is scheduled to close on April 1.