NEC confirms job cuts

The company has announced a profits warning

NEC bosses have confirmed jobs are to be shed at the company's Livingston plant as a part of a plan to cut memory chip production.

Speculation had been mounting in recent weeks that about 800 staff at the computer giant's West Lothian factory would be axed because of a global slump in demand for microchips.

A profit warning was issued by NEC on Friday in Tokyo and the plan to cut Dynamic Random Access Memory (DRAM) chip production was confirmed.

However, it is not clear yet exactly how many people will be affected.

The plant produces memory chips for computing devices

NEC Corp senior managing director Shigeo Matsumoto said: "Prices for semiconductors will not turn around in the next quarter or beyond so we will continue to reduce production of DRAM everywhere other than in Hiroshima.

"We are now considering withdrawing from mid-size DRAM product lines in Japan. During the current fiscal year, we will stop DRAM output in Scotland."

Mr Matsumoto added: "We will have to cut jobs there."

NEC, on Thursday, said it would spell out next week what the future for its Livingston workforce would be.

Livingston accounts for a fifth of the company's production of DRAM chips, the microchips which power personal computers.

Fears for 800 jobs

In the past year, the price of these chips has fallen from $15 to less than $2.

NEC had been planning to phase out D-RAM production over the next two to three years.

The move is expected to mean a 50% cut in production at its plant in Livingston, and the loss of half of its 1,600-strong workforce.

Fears for the plant first emerged more than two weeks ago when a Japanese newspaper predicted that the company would cut 800 jobs at Livingston.

The move will be a further blow for the electronics industry in Scotland, as West Lothian has already seen the loss of 3,000 jobs through the closure of the Motorola mobile phone plant in Bathgate.