News Room - Business/Economics

Posted on 10 Dec 2008

Sony to cut 8,000 jobs, shut plants

Japan's Sony Corp said Tuesday that it was cutting 8,000 jobs worldwide and shutting some plants as part of an overhaul of its business to cope with the global economic downturn.

 

The electronics giant said it would axe about 10 per cent of its manufacturing sites, cut investment in its electronics business by about 30 per cent and downsize or withdraw from unprofitable areas.

 

Sony, seen as a bellwether of corporate Japan, said it would lay off about five per cent of its 160,000 workers in its global electronics business. It will also reduce the number of seasonal and temporary workers.

 

"These initiatives are in response to the sudden and rapid changes in the global economic environment," it said in a statement.

 

Japan's electronics giants are facing tougher times after enjoying several years of strong profits thanks to brisk sales of flat televisions, digital cameras and mobile telephones.

 

The company will postpone a planned expansion of a plant in Slovakia that assembles liquid crystal display televisions for the European market.

 

Sony, which makes Bravia flat televisions, Cyber-shot digicams and PlayStation 3 video game consoles, will also end production at two overseas plants, including one in France, that make tape and other recording media.

 

It will also realign its network of plants and shift manufacturing to low-cost countries, while raising some product prices to mitigate the impact of the stronger yen.

 

The group said the measures should enable it to cut costs by more than 100

billion yen (US$1.1 billion) a year by March 2010.

 

"In addition to these measures, Sony will continue to implement measures as required to help assure both short and longer-term profitability and growth," the statement said.

 

Sony said in October its operating profit plunged 90 per cent in the second quarter of the financial year, hit by a surging yen, a weak global economy and intense price competition.

 

The electronics icon has endured a difficult spell in the face of tough competition from rival products such as Apple's iPod and Nintendo's Wii.

 

Last year it enjoyed a strong recovery under its first foreign boss, Howard Stringer, a Welsh-born US citizen. Under his watch, the group has shed non-core assets and axed thousands of jobs.