Renesas Electronics Corporation, a premier supplier of advanced semiconductor solutions, announced “Direction of various measures to establish robust and profitable structure”.
Renesas has been aiming for the stable growth as achieving a double-digit operating profit since the merger in April, 2010. However, the sales figure drastically declined in fiscal year 2011 as a result of the Great East Japan earthquake, flooding in Thailand, as well as sluggish world economy, and Renesas is in urgent need of business recovery. In these circumstances, Renesas is further accelerating its moves to achieve more efficient production and strengthen its financial basis to enhance its profitable structure. As part of the move, Renesas decided its direction to reform domestic production sites of Renesas Group, as well as to streamline employees, the overview of which is described below.
1. Reformation of domestic production sites:
Renesas decided its direction to reform domestic production sites of Renesas Group to establish more efficient production system in line with the direction of Renesas' business strategy. Please refer to the exhibit for more details.
2. Execution of early retirement incentive program:
Renesas made a proposal to the labor union today to implement an early retirement incentive program, and started discussion. The outline of the proposal is described below, the content of which shall be announced again immediately after Renesas makes a resolution followed by an agreement with the labor union.
Eligibility: Employees of Renesas Electronics and its domestic subsidiaries
Application Period: From September 18, 2012 to September 26, 2012
Retirement Date: October 31, 2012
Benefits: Renesas will offer special incentives in addition to their retirement payment to employees voluntarily taking early retirement. In addition, outplacement support will be provided through an outside agency for those who request it.
We have not set upper limitation of applications for the early retirement incentive program, but expect about five thousand and some hundred applicants.
3. Impact on Renesas' financial results:
Expense required and outcome materialized for this fiscal year ending March 31, 2013 by execution of early retirement incentive program described in section 2 above is not confirmed yet at the moment, and shall be announced after confirmation. After next year, Renesas expects annual cost reduction of about 43 billion yen as a result of execution of the program. Furthermore, the impact to consolidated financial results caused by execution of each measure is not confirmed yet at the moment.