NEC is to cut thousands more jobs as it heads for its first full-year loss.
The company says it will lay off 14,000 employees before the end of March. It had hoped that only 1,800 jobs would go, but earnings have continued to deteriorate due to weak IT demand.
The company made a net loss of 155 billion yen (£800 million sterling) in the quarter to December, compared with a profit of 8.3 billion yen a year earlier.
For the year to March, NEC expects to make a loss of 57 billion yen, compared with an earlier forecast of a profit of 30 billion.
Senior managing director Mr Shigeo Matsumoto said: "While the decline in the retail price of our PCs is developing beyond our expectations, a weaker yen is also inflating the cost of imported PC devices".
NEC said that due to the steeper-than-expected profit fall, the company will have to double the restructuring cost to 300 billion yen.
"We take seriously the sharp deterioration of our earnings, although it was caused by the rapid change in market environment," Mr Matsumoto said.
"But with the additional restructuring, we would like to make sure that we achieve earnings recovery in the next fiscal year".
PA