The company struggles to compete with its competitors and looks to secure financial aid

World’s fifth biggest chipmaker cuts 5,000 jobs

Renesas Electronics has announced a restructuring plan that will lead to at least 5,000 job losses.

The plan involves losing half of its 19 plants and will be cutting nearly 12% of its total workforce in order to compete with its aggressive overseas competitors.

The company is restructuring as part of an agreement to receive around 100 million yen in financial aid from creditor banks and its three top shareholders: NEC, Hitachi and Mitsubishi Electric, whilst the cuts are set to save the troubled chipmaker 43 billion yen annually.

After presenting the restructuring plan to its unions on Tuesday, the company is considering the sale or consolidation of eight of its plants.

Renesas Electronics was formed following successive mergers of the chip divisions of its three largest shareholders but has struggled to compete with Korean and Taiwanese chipmakers and last year reported a net loss of 62.6bn yen (£500m).

The company is hoping to avoid the same fate as Japanese chipmaker Elpida Memory, which filed for bankruptcy protection in February citing tough market conditions and fierce global competition.

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