Sony cuts 16,000 jobs, shuts plants to save $1.1 billion

09 December 2008

Japanese electronics conglomerate, Sony Corporation announced yesterday that it has embarked on a series of measures to strengthen its corporate structure and bolster profitability by slashing 16,000 jobs in its electronics business, shutting down several manufacturing sites and cutting cost to the tune of $1.1 billion a year in response to the sudden and rapid changes in the global economic environment.

Of the 16,000 jobs to be eliminated, 8,000 would be regular workers, or roughly 5 per cent of its workforce of 185,800, and an equal number or more temporary and contract staff.

Sony has become the first Asian company to take such harsh measures as it faces the grim reality of low consumer demand which has been compounded by the recent surge in yen against the dollar and the euro, which makes it uncompetitive in the US and European market.

Sony, which has been most affected in its consumer electronics business, will undertake certain short-term measures, including adjusting production, lowering inventory levels, and reducing operational expenses.

Sony plans to reduce employee headcount in the electronics business worldwide by approximately 8,000, out of approximately 185,000 as of 30 September 30 2008 and an equal number of its seasonal and temporary workforces.

It also intends to adjust product pricing to mitigate the impact of the appreciation of the yen, curtail or delay part of its investment plans, and downsize or withdraw from unprofitable or non-core businesses and plans to realign domestic and overseas manufacturing sites, reallocate its workforce and reduce headcount.