Japanese electronics giant Sony (NYSE: SNE) has announced plans for a global retreat in its electronics division, with 8,000 jobs cuts from its existing 160,000 staff by September 2009 and a 30 percent reduction in technology investments designed to save 100 billion yen ($1 billion) by March 2010. Things must be really bad: the company will reduce its 57 manufacturing plants worldwide by ten percent by March 2010. In a statement on its website today, the PS3 and flatscreen TV maker said the retrenchment was in response to the “sudden and rapid changes in the global economic environment”. No word on where the job cuts will be, other than that it will be a “company-wide (including headquarters) rationalization” and that seasonal and temporary staff numbers will be reduced.
Despite the success of its next-gen games consoles like the PS3, Sony’s earnings have taken a real hammering of late: Q208 profits crashed 71.8 percent to 20.8 billion yen ($210.16 million), due in part to the strong Yen, and the company is not saying whether it is still confident of reaching its projected full-year profits of 150 billion yen ($1.51 billion) — a figure that has already been lowered 38 percent thanks to the home electronics sales slump. With the Yen reaching 13-year highs of late, many Japanese manufacturers have seen their profits chipped away due to uncompetitive prices abroad.
Update: Reuters is reporting that the total number of casual, temporary and seasonal staff jobs to be eradicated will be at least 8,000. That gives us a headline figure of 16,000 job cuts of some description, though the casual jobs are clearly not worth the same as full-time positions monetarily.
– Slovakia and France lose out: Due to the “rapid demand slowdown” in the TV sales market, Sony is scrapping plans to invest in extra production facilities at the Nitra plant in Slovakia, one of the company’s LCD TV production centers. By the end of its financial year — Q3 results are due in January — Sony will have pulled out of two more production sites including the Sony Dax Technology Center in the south of France which makes “recording media”.
– Phone technology outsourcing: Sony will outsource the planned increased production of its CMOS image sensor units for mobile phones to third parties by the end of the financial year.