Fri, Sep 23, 2005 - Page 1 News List

Sony takes axe to workforce, factories in restructuring bid

AP , TOKYO, WITH STAFF WRITER

Sony Corp said yesterday it will cut 10,000 jobs globally, slash the number of its factories and cut costs by ¥200 billion (US$1.8 billion) in an ambitious restructuring bid to revive its stumbling electronics business.

The Japanese company said it expected a group net loss of ¥10 billion (US$90 million) in the current fiscal year as the plunging prices of consumer electronics products take a hefty toll on earnings.

The changes, to be put in place by the end of fiscal 2007, which runs through March 2008, would result in a reduction of 4,000 workers in Japan and 6,000 elsewhere, while factories would be cut from the present 65 to 54, company officials said.

In Taiwan, a Sony official who did not want to be named told the Taipei Times yesterday that no job cuts are planned at Sony Taiwan for the time being because the plan refers to global numbers and no details for specific regions were available.

The bold turnaround plan comes under the fresh leadership of Howard Stringer, a US-British dual citizen who was named chief executive of the electronics and entertainment company in March as the first foreigner to head Sony.

Sony has lost money in its electronics sector for two straight fiscal years, and has relied on its movie division -- including the popular Spider-Man series -- and its successful PlayStation consoles in its computer video-game unit to lift profits in recent years.

Under the plan announced yesterday, the company said it would review real estate, stock holdings and other non-core assets and make disposals of some ¥120 billion by March 2008.

Sony said it would downsize or dispose of 15 business categories, reduce the number of models by 20 percent -- compared to the current fiscal year -- and reduce factories by 11.

The company also pledged to turn around its limping television business, aiming to return it to profitability by the second half of fiscal year 2006.

Sony, known as a pioneer in electronics first with the transistor radio and then the Walkman portable music player, has seen some of its glory dimmed by Asian rivals like Samsung Electronics Co that offer cheaper prices.

Sony has been criticized as falling behind in slimmer TV models, such as liquid-crystal and plasma display sets, that are increasingly popular around the world, losing market share to Sharp Corp as well as old-time rival Matsushita Electric Industrial Co, which makes Panasonic brand goods.

Sony also fell behind Apple Computer Inc's iPod in what should have been its forte -- portable music players.

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