Sony to Cut Jobs, Close Plants

Sony Corp. (Tokyo) has announced plans to eliminate 8000 jobs and rein in planned investment. The consumer electronics giant blamed the deterioration in the global economic outlook for the cuts.
“These initiatives are in response to the sudden and rapid changes in the global economic environment,” Sony said in a statement. The company aims save more than $1.1 billion a year through the measures, which also include shutting several plants.
About 10 percent of the company’s 57 plants will be shut, including two overseas sites, and it has delayed plans to expand a site in Slovakia where LCD televisions for the European market are assembled. Sony will also trim spending in semiconductors and will outsource a part of the production it had planned for image sensors for cellphones.
Sony will end production at some plants, including one in France that makes tape and other recording media and will continue moving electronics production to lower-cost countries. Manufacturing sites will be reduced by about 10 percent from 57 today. Sony will also trim spending in semiconductors, and will outsource a portion of the production it had planned for image sensors for mobile phones. The cost of the job cuts and plant shutdowns will be disclosed next year when the company updates its forecast for the fiscal year, the company said.
“Based on such measures, Sony is planning to reduce investment in the electronics business by approximately 30 percent” in the fiscal year ending March 2010, the company said.
The Japanese domestic market is faring badly, with Japan last quarter slipping into recession and no sign of an upturn before the second half of next year at the earliest. Reports released on Tuesday indicated that Japan’s economy sank deeper into recession in the third quarter than initially estimated. The country’s export-driven economy contracted 0.5 percent in July-September, far more than the preliminary figure of a 0.1 percent decrease, revised gross domestic product figures indicated.
Sony’s earnings — like those of many of the region’s export giants like Canon, Samsung and Honda — have plummeted as a result of the slowing export and forced the company to cut its annual profit forecast for the fiscal year through March 2009 by 58 percent in October.
Sony, which has 185,000 employees worldwide, said it will complete the layoffs by the end of March 2010. It did not give a country breakdown for the job cuts but said they will come from its electronics business, which has 160,000 workers. The company also has movie, video game and financial businesses.