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Tue, Oct 21, 2003 - Page 12 News List

Sony will cut 10 percent of jobs

ADMINISTRATIVE COSTS The world's second-largest consumer-electronics maker has previously resisted cutting jobs, but now says it has no choice if it is to make money

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Sony Corp, the world's second-largest maker of consumer electronics, plans to cut as many as 20,000 jobs, or about 10 percent of its workforce, by March 2006 as it stops making televisions in Japan and reduces administration costs, the Nihon Keizai Shimbun said.

"It is true Sony is planning layoffs," spokesman Koichi Izukura said in Tokyo where the company is based, adding he was unable to provide details.

Sony, whose profit plunged 98 percent in the three months ended June 30, will include the cuts in a plan to be announced on Oct. 28, the newspaper reported.

Sony, which had 161,000 workers at the end of March, until now has resisted cuts that have claimed as many as 70,000 jobs at electronics companies such as NEC Corp, Fujitsu Ltd and Toshiba Corp the past three years.

The cuts would follow a vow by chief executive officer Nobuyuki Idei to increase profit margins to 10 percent from 4 percent after costs for the overhaul are subtracted.

"Consumer-electronics makers need to cut costs because it's becoming much more difficult to continue to grow sales," said Makoto Suzuki, who manages the equivalent of US$137 million at Chuo Mitsui Asset Management Co, including Sony.

Led by Idei, Sony is relying on new products such as a hand-held game player and the PSX, a type of game console with a hard disk drive and television tuner, to stimulate sales.

Idei will attend next week's meeting when Sony unveils its reorganization as will Sony president Kunitake Ando.

The reorganization comes after Sony shocked investors and analysts in April by reporting a wider-than-expected fourth-quarter loss after sales at its game business fell by 25 percent and demand for stereos and TVs slumped.

The maker of the PlayStation 2 video-game console, second behind only Matsushita Electric Industrial Co in sales of consumer electronics, has been late in introducing the kinds of job cuts taken by some of its competitors.

Still, an overhaul at some of the Sony's most unprofitable businesses is already underway. Sony Music Entertainment Inc, the company's New York-based music unit, predicted in March it will save about US$100 million a year by cutting 1,000 workers or about 10 percent of its workforce.

Sony in May said it will spend ?140 billion (US$1.29 billion) by March 31 to shed jobs and close factories.

The plant closings, in part, are intended to boost profit at Sony's electronics unit, which reported a 74 percent decline in fiscal first-quarter operating profit.

The company may cut 1,500 to 2,000 domestic jobs, most of them administrative workers at the parent company, the Nihon Keizai said, without saying where it got the information.

Sony also intends to pull out of "unprofitable and non-strategic" operations to pare costs, it said.

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