Sony axes 10,000 jobs

Sony has announced plans to slash 10,000 jobs worldwide, as part of a major restructuring plan. The cuts, which amount to 7% of Sony’s workforce, are expected to be completed by March 2008, the company said.

  • E-Mail
By  Diana Milne Published  October 1, 2005

Sony has announced plans to slash 10,000 jobs worldwide, as part of a major restructuring plan. The cuts, which amount to 7% of Sony’s workforce, are expected to be completed by March 2008, the company said. Around 4000 jobs will go in Japan, with the remaining 6000 cuts overseas and the company will also close or sell 11 of its 65 manufacturing plants. A press statement by Sony confirmed the job losses: “Our structural reforms are expected to achieve a 200 billion yen reduction in cost by the end of fiscal year 2007.” “This will include rationalising unprofitable businesses, reducing the number of product models, and consolidating manufacturing sites, leading to a reduction of 10,000 in the global group headcount, ” it explained. The statement also described how the company aims to focus on revitalising its electronics business: “For our growth strategy in electronics, resources will be focused on HD products, mobile products and semi conductors/key component devices that can further differentiate Sony’s products from the competition.” “A division to promote the development of Cell processor- related technology, products and applications will be created reporting directly to Sony’s CEO,” it went on to say. According to Matthew Mathai, senior manager of corporate communications at Sony Middle East, the region will not be affected by the job cuts: “We do not foresee this having any kind of impact on the Middle East and Africa region.” “It’s a decision that has been made on a global level – they have given all their reasons and we have to agree with them. But no we don’t have any concerns about any impact here,” he said. Mathai said that unlike in some other parts of the world where Sony has been losing revenue to its rivals, the market in the Middle East is still strong: “I think we have been doing very well and there is a fast and growing market for Sony’s products in the region.” While Sony’s interest stems from Hollywood blockbusters, through its studio business to consumer electronics, it has been struggling to compete with rivals on several fronts. For instance, Matsushita and Sharp are beating it in flat televisions, while in the portable music industry, the Walkman has lost out to Apple’s iPod. Its revenues have fallen due to steep price drops and weakening demand for older products in which Sony has a relatively high market share such as CRT TVs and CD walkmans. The company said it expected a group net loss of US$90million in the current fiscal year. Over the past five years the firm’s shares have lost two- thirds of their value. The restructuring plan follows the appointment in March this year of UK-born Sir Howard Stringer, the former head of its US operations as the group’s first foreign chief executive. In a similar vein, Siemens AG announced this month that its computer arm will cut more than 2,400 jobs as the firm accelerates its aggressive drive to stem mounting losses. By regrouping its IT maintenance division and culling its computer service unit, workforce the company hope to save US$1.8 billion annually by 2007.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code