Renesas To Post Extraordinary Loss As A Result of Early Retirement Program

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Wednesday, October 3, 2012

Renesas To Post Extraordinary Loss As A Result of Early Retirement Program

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Renesas Electronics said on Wednesday that it will post a 85 billion yen ($1.1 billion) extraordinary loss in the July-September quarter after a larger-than-expected number of employees volunteered for its redundancy scheme.

The Japanese supplier of semiconductor solutions said that 7,511 employees have applied for its early retirement incentive program. According to the program, Renesas the retired personnel will receive compensation.

Renesas estimates the extraordinary loss of approximately 85 billion yen in the second quarter of the fiscal year ending March 2013 due to this program. The labor cost will be reduced by approximately 54 billion yen a year with this result.

Although the number of the applicants is more than the five thousand and several hundred that was originally expected, Reneasas said that would have little impact on the Renesas Group's business operations including sales and production.

Renesas is now reviewing the impact on the financial forecasts for the fiscal year ending March, 2013 including other items recorded in the extraordinary income and loss.