Renesas to Cut 1,000 Domestic Jobs

What happens when a big corporation faces stiff competition from its rivals and when business is not as good as usual? Who takes the biggest blunt of poor performance of a corporation and what happens when corporations’ aspirations get the better of them? Who are the obvious casualties? Historically, the workforce has been the sacrificial goat whenever a corporation finds itself in any of the above stated scenarios. Something similar is happening at Japanese semiconductor firm Renesas Electronics as it plans to cut roughly 1,000 jobs- roughly 5 percent of its workforce. Most of these cuts are targeted at their employees working in Japan.

As a starting measure, Renesas is calling for voluntary early retirements.

The firm recently announced its financial performance in FY 2018, and the numbers were not very encouraging. Renesas did extremely poorly as compared to some of its closest rivals like STMicroelectronics, Infineon Technologies, NXP Semiconductor, and Texas Instruments. The jury is out on if this move is to make up for the lost revenue in the last financial year, and use the extra cash on funding overseas business opportunities.

Under CEO Bunsei Kure, Renesas has tried to shift from its predominant focus on the Japanese domestic market and look for business ventures elsewhere. The firm is trying to establish itself out there in the global world order, and it wants to forge internationalism in its growth potential DNA.

One of the most notable developments under this new found identity has been the acquisition of IDT in a whopping $6.7 billion deal. An official spokesperson of the firm said, “2019 will be the first year of IDT integration and an important year that serves as a launching pad for our further growth.”

Currently, Renesas doesn’t have a lot of proprietary technologies that can synergise with IDT’s data centre technologies and to make up for that, Kure said that “Renesas will put in resources to IDT’s data centre business.”

Maybe, Renesas is taking a cue from its own past when it saw 14,000 job cuts between 2011 and 2014 to put its business back in the black in 2015.

According to Renesas, the planned job cuts are a pre-emptive measure as it anticipates that IDT’s integration will take up “a lot of energy for structural reform,” the spokesperson said. Renesas wants to streamline operations now, she added, “while we are generating profits.”

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