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Sony to axe 8000 jobs

Company to reduce workforce by 5 per cent and close manufacturing plants as Japanese economy shrinks

Sony has revealed that it will cut 5 per cent of its workforce - around 8000 jobs - by April 2010 as part of a drive to cut costs as the economic downturn bites in Japan.

The company will also close two of its overseas manufacturing sites, including one at the Dax Technology Center in France, with the aim of reducing its plant operations by 10 per cent over the next 15 months - specifically in LCD and mobile phone technology areas.

Additionally the company will cut manufacturing investment by around 30 per cent in a bid to save JPY 100 billion (USD 1.1 billion) by March 2010.

The measures were taken in response to the "sudden and rapid changes in the global economic environment" that saw Japan's economy shrink by 1.4 per cent in the past quarter - more than four times the amount previously estimated.

"Particularly within its electronics business, where Sony has been most affected by the acute downturn in the economic climate, the company has already undertaken certain short-term measures, including adjusting production, lowering inventory levels, and reducing operational expenses," read a statement.

"Going forward, Sony intends to adjust product pricing to mitigate the impact of the appreciation of the yen, curtail or delay part of its investment plans, and downsize or withdraw from unprofitable or non-core businesses.

"Furthermore, Sony plans to realign domestic and overseas manufacturing sites, reallocate its workforce and reduce headcount."

Additional job cuts in that time frame were not ruled out, and it's not clear yet if the PlayStation business will be materially affected by the business changes.

UPDATE: Sony Computer Entertainment has told that it will be involved in the corporate review.

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