Sony to Cut 8,000 Jobs

http://www.nytimes.com/reuters/technology/business-sony.html?_r=1&hp

TOKYO, Dec 9 (Reuters) - Japan's Sony (NYSE:SNE) Corp said it will slash about 4 percent of its workforce, scale back investments and pull out of businesses as it aims to cut $1.1 billion in costs out of its ailing electronics operations.

The 8,000 job cuts -- the biggest announced by an Asian firm so far in the financial crisis -- and other restructuring steps underscore challenges facing Sony, which has fallen well behind Apple Inc's iPod in portable music and is struggling to make money on flat panel TVs.

Analysts questioned if it would be enough for Sony, which employs about 186,000 people worldwide in businesses ranging from movie making to video games.

"The number sounds big, but this staff reduction won't be enough. Sony doesn't have any core businesses that generate stable profits," said Katsuhiko Mori, a fund manager at Daiwa SB Investments.

"After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company."

Shares in Sony, which have fallen nearly 70 percent this year, closed up 3.9 percent at 1,896 yen ahead of the announcement.

The restructuring marks a major setback for Chief Executive Howard Stringer, who had seemed to have the electronics and entertainment conglomerate back on track after implementing a wide-ranging restructuring after taking the helm in 2005.

Like rivals Samsung, Panasonic and just about every other big consumer goods firm, Sony faces a bleak Christmas shopping season as the financial crisis grows into a broad recession that has already engulfed the United States, parts of Europe and its home market in Japan.

YEN HURTS TOO

Sony, along with other Japanese manufacturers, has also been hit hard by a surging yen, with the currency's rise to 13 year highs this year cutting into the value of its earnings and making its products less competitive in overseas markets.

The maker of Bravia flat TVs and PlayStation 3 video game consoles, said in October when it more than halved its annual operating profit forecast that it would need to close some plants, reduce capital spending and lay off workers.

Hiroaki Osakabe, fund manager at Chibagin Asset Management, said the restructuring was unlikely to trigger a share rally.

"The scheme doesn't contain anything new, like a new earnings pillar or a growth strategy. It was something that people had expected, and I think the market had already discounted the announcement," he said.

Sony said it would delay plans to boost output for liquid crystal display TVs in Slovakia, outsource production of image sensor semiconductors, and reduce the number of manufacturing sites by about 10 percent from the current 57.

It aims to cut investment in its electronics business by 30 percent in the next business year to March 2010 compared with a previous business plan.

Ailing electronics company? Their stocks have dropped 70%?

I didn't know it was THAT bad and I thought their TV's were selling pretty well. Plus are they not having decent sales of PS3's, bluray players and Sony movies and software? Geez how much product do they have to sell to make a profit?

That's what happens when you try and cut in on Foremans market...

falcon,

things are difficult, indeed. this might be anecdotal, but from time to time, you see people writing that toshiba sees more profit than sony does for each PS3 sold because sony is still selling the machines at a loss while toshiba is in the black for each cell processor.

If that's true...well that's funny.

China is slowly taking over the world, and this fact scares the shit out of me.

Its true about toshiba and the cell processor. They bought the rights to the processor some time late last year. Ironic isn't it. I hope this doesn't mean the beginning of the end for blu-ray. It would really suck for Sony to first kill off their competition (which many critics felt was a superior product, hddvd I knew thee well!!!) and then end up killing off hd movies altogether due to their own poor mismanagement of the market and their own products. This feels alot like the auto industry problem that the big 3 are having right now. The only difference is I doubt taxpayer money will be available to bail out an electronics company. O.K. I'm done crying over spilled milk now. Back to the dark knight.

Quote:
The Japanese firm said last week it would cut 16,000 jobs, but Chubachi said more steps -- including further lay-offs -- may be needed. "With only these measures, we cannot fully survive the current economic situation,"

http://www.marketwatch.com/news/story/sony-may-cut-more-jobs/story.aspx?guid={9236BB23-C823-40F7-9B2C-3A0C333A2177}&dist=msr_1

From Scotsmans link...

Quote:
He also said Sony would have to reassess its goal of expanding its personal computer, Blu-ray Disc and semiconductor operations into "trillion yen businesses" by March 2011.

Yikes. The reality is ALL electronics companies are feeling the pinch right now, it's not just Sony. It'll be interesting to see what all these companies do next year while sales continue to plummet.

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[Post edited by Falcon01 on Dec 18, 2008 - CST 9:08 AM]

Sony, you mean the company that has this ridiculous "surplus in cash" according to some message board members is cutting jobs?!? Jinkies.