Renesas announces implementation of further rationalization initiatives

JAPAN: Renesas Electronics Corp. announced in “Renesas Electronics Announces Share Issue through Third-Party Allotment, and Change in Major Shareholders, Largest Shareholder who is a Major Shareholder, Parent Company and Other Related Companies,” released on December 10, 2012, the company’s intention to pursue “further rationalization initiatives, including further optimization of the
personnel structure.”

Renesas presented a proposal and explanation to the labor union regarding this direction of actions, and consultations have  begun. A description of these initiatives is provided below.

Based on the direction of actions announced on July 3, 2012, in “Renesas Electronics Announces the Direction of Various Measures to Establish Robust and Profitable Structure,” the company has proceeded according to plan with efforts to secure support and capital from major shareholders and main banks, personnel rationalization measures centered around an early retirement incentive program, the restructuring of production facilities in Japan, and other initiatives.

In addition, the company is implementing measures aimed at assuring future growth, as announced on December 10, 2012, in “Renesas Electronics Announces Share Issue through Third-Party Allotment, and Change in Major Shareholders, Largest Shareholder who is a Major Shareholder, Parent Company and Other Related Companies.”

As announced on December 10, 2012, in “Renesas Electronics Revises Full-Year Forecasts,” due to factors such as prolonged debt worries in Europe, further market slowdown in China and other emerging economies as well as the effect on demand from the increased uncertainty in Japan-China relations, the Company has lowered its financial forecasts, and the sales are on a downward trend.

Against this background, the company intends to implement further rationalization initiatives with the aim of strengthening the revenue base by improving the cost structure; speeding up decision-making; achieving increased adequacy and efficiency in our business operations; and further boosting competitiveness through measures including restructuring of the design, development, production, and sales structures.

A proposal and explanation regarding the above was presented to the labor union, and consultations have begun.