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This page was last updated on November 11, 2001
NEC Corporation has just announced that it will not build a new factory in Northern California because of the weak economy. This factory, which was planned to open in the year 2003, would have employed 700 workers.
So far this year, NEC has reduced its workforce at its semiconductor factory by 44 percent. Last year, NEC had 1,600 employees at its factory. Now it has only 900.
500 workers were laid-off this year. A layoff is when employees lose their jobs because of the bad economy or poor business conditions. (An employee is "fired" when they lose their jobs because they were a bad worker.)
200 employees lost their jobs because of "attrition." Attrition means that workers leave their jobs for personal reasons, such as taking other jobs, retiring, moving to another city, illness, or many other reasons.
The semiconductor business worldwide is down almost 42 percent from August 2000. It is down 36 percent in Japan, 40 percent in Europe, and 55 percent in North, South and Central America. NEC's worldwide semiconductor sales are down 34 percent, and it lost over $451 million ($451,000,000, or about 54,000,000,000 yen) in sales this year.
Ebara Technologies Inc. is another Japanese company in Northern California that is also laying-off workers. Located very close to NEC, Ebara just released 55 workers.
The company makes pumps used in semiconductor manufacturing. Since January 1, 2001, it has reduced its workforce by 30 percent.
Ebara has been in its Sacramento, California location since 1991. Its customers include NEC, IBM, Fujitsu, Intel, and Hewlett-Packard Corporation.
Recently it sold part of its business to a group of Korean investors who are building a brand new factory here in Northern California.
The United States economy continues to fall into a recession. Over 410,000 jobs were lost last month. In California, the unemployment rate is now 5.7 percent, compared to 5.4 percent in America.
Still, economists predict that the American economy will start to grow again in the spring. Until then, the unemployment rate should continue to rise.