SONY Announces Massive Cuts

sony

via BBC

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.

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