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Sony to cut 10,000 jobs, slash factories
Restructuring bid aimed at reviving stumbling electronics business

TOKYO - Sony Corp. said Thursday it will cut 10,000 jobs globally, slash the number of factories and cut costs by $1.8 billion in an ambitious restructuring bid to revive its stumbling electronics business.

The Japanese company — under new management since March — said it expected a group net loss of 10 billion yen ($90 million) in current fiscal year. Plunging prices of consumer electronics and missteps with its Walkman portable music players have taken a hefty toll on earnings.

The changes, to be put in place by the end of fiscal 2007, which runs through March 2008, would result in a reduction of 4,000 workers in Japan and 6,000 outside the country, while factories would be cut from the present 65 to 54, company officials said. With more than 151,000 employees worldwide, that amounts to about a 6 percent cut in its workforce.

The bold turnaround plan comes under the fresh leadership of Howard Stringer, an British-American dual citizen who was named chief executive of the electronics and entertainment company in March as the first foreigner to head Sony.

“We have made promises before but we failed to execute them,” Stringer said at an afternoon news conference in Tokyo. “We must fight like the Sony warriors that we are.”

Sony has lost money in its electronics sector for two straight fiscal years, and has relied on its movie division such as the popular “Spider-Man” series and its successful PlayStation consoles in its computer video-game unit to lift profits in recent years.

Sony, known as a pioneer in electronics first with the transistor radio and then the Walkman portable music players, has seen some of its glory dimmed by Asian rivals like Samsung Electronics Co. that are offering cheaper prices.

Falling behind
It has been criticized as falling behind in slimmer TV models, such as liquid-crystal and plasma display sets, that are increasing popular around the world, losing market share to relative Japanese newcomer Sharp Corp. as well as old-time rival Matsushita Electric Industrial Co., which makes Panasonic brand goods.

Sony also fell behind Apple Computer Inc.’s iPod in what should have been its forte — portable music players — clinging to CD and MD formats and its own proprietary but unpopular format for digital music files. The iPod models are proving a big hit in Japan, where Apple began its iTunes store in August to rave reviews.

President Ryoji Chubachi, also head of the electronics division, conceded that his company wasn’t making products that people wanted to buy and that Sony’s technological prowess had declined. Sony said it would focus now on so-called “champion products” including the PlayStation 3, Bravia liquid crystal display televisions and the Walkman portable music players.

“There can be no revival for Sony without recovery in our TV business,” Chubachi said. “We are definitely feeling that the recovery is underway.”

Under the plan announced Thursday, the company said it would review real estate, stock holdings and other non-core assets and make disposals of some 120 billion yen ($1.2 billion) by March 2008.

To cut costs, Sony said it would downsize or dispose of 15 business categories, reduce the number of models by 20 percent compared to the current fiscal year, and reduce the number of factories by 11 to 54. Sony did not specify which businesses would be trimmed.

“These reductions will help streamline our operations and enable us to operate more efficiently,” the company said in a statement.

Sony pledged to turn around its limping television business, aiming to return it to profitability by the second half of fiscal year 2006.

Over the last five years, Sony shares have lost two-thirds of their value, and are currently trading at about $36.


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I got this from IGN boards. What are your thoughts?

I think that is not really relevent considering only maybe 10% of the global population could afford one of those damn things!

"Sony Warriors"

I would be very suprised of Sony did go under.
Yeah the bosses probably want more money.

I just thought it was interesting.

We can hope, Can't we..

It is. Oh! Poor Sony!

ah man! now who's gunna make all that really cool stuff that I can never afford?!

murder_killz

Yeah, I read that in the newspapers today. It was on the front page!

Even mighty Sony has to fight with the stagnating economy.

Basically I think that's no problem for Sony, though. It's a quite wealthy company.

Hm, I'm not convinced that Sony is done for quite yet. The PS3 will probably help, and who knows? That Blue-ray catastrophe might actually work.

What if the PS3 bombs (probably won't, but its hypothetical), do you think thats the last of the "playstation"? Not Sony, but Playstation.

And then that Failed. Maybe the PS8909778 will fail. Then they will be gone.

And then that Failed. Maybe the PS8909778 will fail. Then they will be gone.


I've heard price ranges for the PS3 (because of harware) from 500-1000. Thats a bit much, don't you think?

I don't see Sony going under any time soon, nor their line of Playstation material. I could see the PS3 not doing as well as they would have projected because of the price issue, but that will get fixed within six-months, I'm sure

Alot of times, companies go through new "lay-outs" of how their company is set-up to change with the times. The biggest one I can think of right off-hand that has been changing is Sears. When I first started working at Sears, everyone that worked there was complaining about all the downsizing of the crew, department changes, and selling strategy. I never got to experience what they all meant by "the old Sears," but I did get to see how the "new Sears" was coming along. The sales at the store were almost constantly going up, and compared to years before, doing much better.

Sony is a HUGE company, and they didn't become so big overnight, as we all know. I'm sure all they are doing is making some company-wide changes to stay up with the times. Unfortunately, that does mean job-loss. Hopefully the product will get better though. I've had buddies who had more recent Sony products (non-game related) that used to swear by Sony, but not so much anymore. We'll see how it pans out I suppose.

And then that Failed. Maybe the PS8909778 will fail. Then they will be gone.


I've heard price ranges for the PS3 (because of harware) from 500-1000. Thats a bit much, don't you think?

And then that Failed. Maybe the PS8909778 will fail. Then they will be gone.


I've heard price ranges for the PS3 (because of harware) from 500-1000. Thats a bit much, don't you think?


I'm gonna guess you think thats outrageous (sp?).

I hope Sony doesn't go under. They make good stuff. As far as staying behind in the flat panel/LCD business, I can't blame them. It's an early technology. Besides, CRT monitor images always look much more solid. Earlier ones can make your hair stand up straight if you put your head on the front and press degauss . Not only that, but I also don't want Microsoft to dominate the console market. Windows locking up is bad enough.

I don't like either of them, but I like what M$ makes more. They say what they are going to do, and they do deliever quite well.

Neither Sony nor the PS3 will go under. Not even hypothetically.
People will buy the PS3 like mad, regardless of the price, believe me.
At first the price might be very high, but the freaks and posh kids will buy it. Then they lower the price as far so that more people can afford it.

With a company that finances nuclear weapons..
i hardly think so!

Wish theyd blow up and dissapear!

They killed SEGA.
Who's next?