Sony to cut plants and 8,000 jobs
Dec 09, 2008
Sony has announced plans to cut 8,000 electronics jobs - 5% of the division - as well as shutting 10% of its manufacturing sites.
The company said the jobs would be cut by April 2010, but did not say in which countries the staff would go.
Sony said it would also cut at least 8,000 temporary and contract staff jobs in the same sector.
It said it had been trying to reduce production because of the downturn, but warned it still had to do more.
The news came as Japan said its economy had shrunk between July and September by much more than initially estimated.
The Cabinet Office said the economy had shrunk at an annual rate of 1.8% in the quarter, compared with its original estimate of 0.4%.
Investment cut
Sony said the cost-cutting plan was aimed at responding to "the sudden and rapid changes in the global economic environment".
Sony aims to generate cost savings of about 100bn yen ($1.1bn; £730m) by the end of the next financial year.
It will cut its investment in electronic operations by 30% and shut down about 10% of its 57 production facilities.
"The number sounds big, but this staff reduction won't be enough," said Katsuhiko Mori, a fund manager at Daiwa SB Investments.
"Sony doesn't have any core businesses that generate stable profits - the next thing we want to see is what is going to be the business that will drive the company."
Last month, Sony reported a 71% fall in net profit for the three months to the end of September, compared with the same period in 2007.
Its net profit for the quarter was 20.8bn yen, down from 71.8bn yen for the same three months last year. Sales were down 0.5% at 2.1 trillion yen.
Originally posted on the BBC News site at: http://news.bbc.co.uk/1/hi/business/7772597.stm
Sony doesn't have any core businesses that generate stable profits - the next thing we want to see is what is going to be the business that will drive the company. The cutbacks come as Japan feels the impact of the global recession, with the country's economy reportedly shrinking by some 0.5% in the past three months. Expected to be implemented by April 2010, there has been no confirmation where the cuts will take place, nor what impact they will have on Sony's gaming division.
----- UPDATE -----
SOE Confirms it is Not Affected By the Cuts:
Earlier today we reported that Sony will be cutting 8000 jobs over the next few years. While the press announcement did mention the non-core businesses and electronics manufacturing specifically, gamers were left wondering if Sony Online Entertainment would be affected.
We have now confirmed with the Senior Director of Global Corporate Communications & PR of SOE that Sony Online Entertainment is not impacted by today's announcement.
From Ten Ton Hammers News at: http://www.tentonhammer.com/node/50930
