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Sony Reportedly Plans 10000 Job Cuts

Sony Reportedly Plans 10000 Job Cuts
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4/9/2012 3:27 AM ET

Sony Corp. (SNE: Quote), which is expecting losses for the fourth straight year, plans to slash a total of 10,000 jobs worldwide amid its turnaround efforts, The Nikkei reported citing sources. The Japanese consumer electronics and entertainment firm is likely to complete the reduction, affecting about 6 percent of its workforce, by the end of this year.

Chief Executive Officer Kazuo Hirai, who took the helm from Howard Stringer on April 1 and took over the direct supervision of the ailing TV business, is set to brief on the company's business plan on Thursday.

Amid intensifying competition, Sony more than doubled its annual loss forecast in February to 220 billion yen ($2.7 billion) from a November forecast of 90 billion yen, due largely to the slump at its core TV business. Consolidated sales are now expected to be 6.4 trillion yen. In the previous fiscal year, net loss was 259.6 billion yen and sales were 7.18 trillion yen.

The year ended March 31 was marred by losses at affiliated companies, mainly S-LCD and Sony Ericsson, production cuts caused by last year's Thailand floods and earthquake and Tsunami, a stronger yen, as well as the cost of exiting a display-panel venture with Samsung.

Sony had 168,200 employees as of March 31. The company reportedly will cut as many as 5,000 jobs through the consolidation of the firm's chemical and small and medium-sized LCD operations. However, the Japanese newspaper did not provide a clear picture about how many of the cuts will happen in Japan and how many overseas.

Sony may also request that its seven executive directors, including chairman Stringer, return their bonuses taking responsibility, the Nikkei said without citing its sources.

It is expected that the new restructuring program will cover the sales and administration departments as well, in comparison to previous restructuring programs that focused mainly on selling or consolidating production bases.

Sony's December 2008 restructuring program saw 16,000 workers leaving the firm and closure of five of its nine TV production bases after the global financial crisis hit demand for its electronics products. However, the moves could not help it to return to a profit since then.

In order to accelerate its new consolidation push, the company is planning sale of noncore operations. In March, the company said it would sell its chemical operations to the government-affiliated Development Bank of Japan. On April 1, Sony, Toshiba Corp. and Hitachi Ltd. merged their small and midsize LCD operations into a new firm called Japan Display.

While announcing the recent management restructure, Sony had said that the changes "are intended to drive revitalization and growth across Sony's core electronics businesses, and deliver compelling user experiences through convergence of the unique assets in place throughout the Sony Group."

Sony shares closed Monday's trading at 1,644 yen in Japan, up 10 yen or 0.61 percent.

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by RTT Staff Writer

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