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Sony job cuts unlikely to affect games division

By Matt Martin

Thu 22 Jan 2009 3:25pm GMT / 10:25am EST / 7:25am PST

Euro president David Reeves assures staff jobs are safe, as PS3 sales forecasts remain unchanged

Sony Computer Entertainment

Sony Computer Entertainment is a Japanese videogame company specialising in a variety of areas in the...

Sony Computer Entertainment has told that the cost cutting measures announced by Sony Corporation today are least likely to affect the games departments.

As detailed this morning, the electronics division is the worst hit of all Sony divisions, with the closure of the manufacturing plant in Ichinomiya in Japan, and a 30 per cent reduction in headcount planned for TV design operations.

A slide from Sony's corporate presentation this morning stated that there are planned headcount reductions for the games, movie and pictures divisions - without going into further detail - and prompting speculation that jobs were to go in videogame departments.

However, Sony Computer Entertainment Europe president David Reeves has informed staff internally that the JPY 250 billion (USD 2.8 billion / EUR 2.1 billion) cost-cutting measures will not include a reduction in games staff, as previously stated last month.

"This is still the case. He has just sent a message to employees here to that effect," said a spokesperson for Sony.

"As was the case with the previous Sony restructuring announcement this mainly concerns our electronics business."

As part of a revised earnings forecast, where Sony now expects a loss of JPY 150 billion (USD 1.68 billion / EUR 1.29 billion) for the financial year ending March 2009, the company's games division is expected to increase losses by approximately JPY 30 billion (USD 337 million / EUR 258 million). Half of that loss is due to adverse currency fluctuations, the other half lower than expected sales, said Sony.

Hardware sales expectations for the year ended March 2009 remain unchanged for the PlayStation 3 – the company still expects to sell 10 million units.

However, Sony has dropped estimates for sales of both the PSP and PlayStation 2 by one million, to 15 million units and 8 million units respectively.

Uncertain economic conditions in emerging markets have hampered sales of the stalwart PlayStation 2, said Sony, while PSP estimates have been reduced to a previous forecast.

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