Sony Slashes 10,000 Jobs
September 26, 2005 - Sony on Thursday announced a companywide restructuring plan that will result in the cutting of 10,000 jobs, the closure of 11 plants and the end of its existing network system by the end of fiscal year 2007.
The world's second-largest consumer electronics maker said it expects to save $1.8 billion in the process as it refocuses its efforts on electronics, televisions, digital imaging, DVD recorders and portable audio. Of the 10,000 in job cuts, the company said it will slash 4,000 jobs in Japan and 6,000 jobs elsewhere. The cost-cutting measure is primarily hitting Sony's hurting electronics division. But the eliminations are expected to bolster profits for the whole company, including other game and entertainment areas.
In recent earnings reports, Sony has cited stiffer competition in the flat-screen TV market for weakening its traditionally hefty electronics revenue.
Howard Stringer (CEO), Ryoji Chubachi (President) and Nobuyuki Oneda (CFO) outlined the details of the company's rebuilding process during a strategic conference meeting with management and key partners in Tokyo.
During a Thursday strategy conference call, Stringer said these moves should cut costs by $1.8 billion dollars. The shutting down of 11 plants and downsizing of 15 unspecified electronics business categories will also be used to restructure and increase profitability.
Also during the call, Sony revised its forecast through fiscal year March 2006 to a $90 million net loss. It had earlier predicted a $90 million profit.
Sony said in a statement that it does see potential with emerging technologies, including PSP software and Blu-ray discs, to strengthen the company going forward.