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Finance

Sony axing 10,000 jobs

Sony axing 10,000 jobs

Mon 09 Apr 2012 7:53pm GMT / 3:53pm EDT / 12:53pm PDT
Business

Sony to scale back labor costs with six percent workforce reduction

Sony, now run by former PlayStation boss Kaz Hirai, is looking to reduce its global workforce by 10,000 more jobs (six percent) in an effort to stave off growing debt. The company explained that half of the cuts would come from consolidating the firm's chemicals and small and midsize LCD operations.

Additionally, seven senior managers, including Chairman Howard Stringer, are expected to give up their bonuses for the latest year, according to the Nikkei.

PlayStation's division has not formally made an announcement regarding the cuts. It doesn't appear that the PlayStation business was seriously affected. We've contacted Sony Computer Entertainment for clarification.

What is clear is that Sony has been experiencing a major downtrend in TV sales.

"Under a new CEO, it's easier to cut jobs or go in a new direction," said Yuuki Sakurai, head of fund manager Fukoku Capital.

"One of the things I'd like to see is that they shift their resources to other areas outside TVs ... If they stick to TVs, they may have to fight a war they may not be able to win."

Sony has been in the red for four years now, with 2011 spelling a $2.7 billion net loss due largely to failing TV sales. Companies such as Apple and Samsung have cut deeply into Sony's margins over the past few years.

The announcement did help Sony see a gain on the Nikkei average, closing up 0.6 percent. This has done little to stem the more than 10 percent drop over the past three weeks for the company's stock.

[via Reuters]

8 Comments

Andrzej Wroblewski
Localization Generalist

102 69 0.7
The boycott of Sony products seems to have the first impact on the corporation. Well done consumers! What I find especially hilarious is the stance of their management & marketing. They're still clueless about any of this -- and probably will remain so until the notion that the era of marketing is gone hits them hard in the face.

Edited 2 times. Last edit by Andrzej Wroblewski on 10th April 2012 6:21pm

Posted:2 years ago

#1

Private
Industry

1,176 182 0.2
I dont think there is any specific boycott of Sony products, but rather that Samsung and LG cleary have far cheaper good quality HDTV's compared to the Bravia series thats while good quality and design a lot more expensive.

Posted:2 years ago

#2

Jack Lee

60 6 0.1
Forgive my ignorance, but what's this about a Sony boycott? Is there a Sony boycott happening? If so, are we sure that it is what is causing the massive losses suffered by the company? I was under the impression that Sony was hemorrhaging cash because of a grossly unprofitable TV and LCD business that was being thoroughly undercut by every competitor, a slowdown in the PC space as people shift away from more expensive models like the Vaio, and the increasingly strong yen, which is destroying any Japanese exporter's revenues.

If I remember correctly, the Playstation branch is one of the more successful arms of the company, and it might even be making a profit at this point. I thought that was one of the main reasons Kaz Hirai was chosen to succeed Sir Stringer. Feel free to correct me if I'm wrong, though, I'm only going by second-hand sources that I read a while ago.

Posted:2 years ago

#3
@Jack - as "successful" as the Playstation arm is, the PS3/Cell was still responsible for the loss of billions of dollars over it lifetime. With the $6bn LOSS just announced (see other article), Sony are in BIG trouble, make no mistake. At this rate, they are going to struggle to secure additional lines of funding.

This 10,000 job loss may well be the "tip" of the iceberg - this could be the start of another Nokia, with up to 50,000-100,000 more jobs (& divisions) to go.

Sony really do need an entirely new strategic rethink. Are they media? Are they hardware? What area(s) do they focus on?

Posted:2 years ago

#4

Alfonso Sexto
Lead Tester

807 637 0.8
@Andrzej:

Let's ask that 10.000 people what they think about your statement, shall we?

Posted:2 years ago

#5

Andreas Gschwari
Senior Games Designer

558 607 1.1
@Alfonso: could not agree more.

Not always a fan of Sony, but to gleefully call a boycott (what boycott?) a success when 10.000 people lose their job is very cold.

Posted:2 years ago

#6

Nuttachai Tipprasert
Programmer

79 60 0.8
Excuse me, but I don't think we really have any boycotts to begin with. Everyone knows that Sony became this mess because it loses very hard in TV business. Playstation business is one of the few that didn't generate loss last year. That means, even there are some people turn their back to Sony, it doesn't seem like this is the main reason why their debt continue growing.

Posted:2 years ago

#7

Craig Page
Programmer

382 218 0.6
I don't understand why Sony is so scared that they lay off 10,000 people and cut executive bonuses. Their TVs are so overpriced that all they would have to do is sell two of them and they will be profitable again. Just imagine the profits if they could sell three TVs!!!!!!!!

Posted:2 years ago

#8

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