Sony to Cut Manufacturing Plants and 8,000 Electronics Jobs
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 had been trying to reduce production because of the downturn but warned it still had to do more.
The news came as Japan drastically raised its estimate of the amount its economy shrank from July to September. The Cabinet Office said the economy had shrunk at an annual rate of 1.8% in the quarter, down from its previous estimate of 0.4%.
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." More PlayStation 3 News...
This outcome is not very surprising given the global economic crisis... but for this to happen to one of the best electronics companies in the world... you would have thought they had some scheme planned to counter any acute recessions. I don't think this can be directly or exclusively associated to the PS3's unexpectedly slow climb as a gaming console.
On the same note, MS doesn't seem to be having so many economic problems. Does that mean that software companies are pulling it off way better than hardware companies, like Sony?
Well it is certainly sad to say the least but I still cannot see a company like sony going under. If American car companies can keep it going after 30 years of doom and gloom talk, certainly Sony will make it through. People often make too much of layoff talk. Companies and consumers alike need to change their behaviors in a lowed economy which means make more, spend less, or both. If stock is down to $20, it's probably a good time to buy Sony stock. If i had some cash I would ...