NEC's New Structure Ready for Monday Start

TOKYO (03/29/2000) - Japan's NEC Corp., one of the world's largest electronics companies, yesterday revealed more information about its new structure that will come into place on April 3 -- the first day of Japan's new financial year.

The new structure, some details of which has been previously divulged, will see the establishment of three main in-house companies: NEC Solutions, NEC Networks and NEC Electron Devices. The company hopes the new structure and resulting management shake-up can reinvigorate NEC and produce a stronger focus on the Internet.

NEC Solutions will have around 52,000 employees and the company is aiming for revenues of 2.3 trillion yen (US$21.6 billion) and a 120 billion yen profit in its first year in business. It will be led by Akinobu Kanasugi and focus on providing solutions and systems intergration to markets from consumer through to corporate.

NEC Networks will comprise of 43,000 workers and is aiming for first year revenues of 1.7 trillion yen and profits of 70 billion yen. The company will be headed by Mineo Sugiyama and concentrate on network technology and products for network operators such as telecommunications carriers and Internet service providers.

NEC Electron Devices is the semiconductor division of NEC and will employ 43,000 people. It hopes for 1.2 trillion yen in revenues in its first year of business and is aiming for profits of 100 billion yen and will be headed by Kanji Sugihara.

Speaking at a Tokyo press conference to introduce the new company presidents, NEC President Koji Nishigaki said the listing of the three companies was being eyed as a medium-term goal of the company.

In addition to the reorganization, NEC is adopting a new performance-based promotion system rather than its existing seniority-based system and a new rewards system for management. Around 150 of the company's most senior management will be enrolled in a stock option scheme while a further 1,800 will be on course to receive a bonus when the stock price exceeds a certain level.

An additional 12,000 employees will receive bonus payments based on business performance.

NEC Corp., in Tokyo, is online at http://www.nec.co.jp/.

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