Sony to cut more than 8,000 jobs, trim CMOS investment, close 10% of plants
The restructuring comes as Sony aims to save $1.1 billion a year.
By Suzanne Deffree, Managing Editor, News -- EDN, December 9, 2008
Sony Corp will eliminate more than 8,000 jobs, cut investments, and end production at 10% of its manufacturing sites as it restructures in the face of the global financial crisis.
In making the job cuts, approximately 8,000 full-time electronics business employees will be laid off. Sony said it will also further cut seasonal and temporary workforces.
Sony had approximately 160,000 employees as of September 30. The position cuts will be made by March 31, 2010, the end of its next fiscal year.
Sony's investment cuts will hit its semiconductor business. Specifically, Sony intends to cut investment expenditures this fiscal year by outsourcing a portion of its planned increase in manufacturing of CMOS image sensors for use in mobile phones to third parties.
In addition, following the rapid demand slowdown in television markets, the consumer electronics giant will postpone recently considered plans to invest in production expansion at its Nitra plant in Slovakia, which is one of Sony's sites assembling LCD televisions for the European market.
Based on such measures, Sony is planning to reduce investment in the electronics business by approximately 30% in the fiscal year ending March 2010.
By the end of the current fiscal year, the company plans to cease production at two manufacturing sites, including the Sony Dax Technology Center in France, which manufactures tape and other recording media. Sony will further reduce the total number of manufacturing sites by approximately 10%, from the current total of 57, by the end of March 2010, shifting and aggregating manufacturing to low-cost areas and utilizing OEM and ODM partners.
Through the restructuring measures announced today, Sony aims to save more than $1.1 billion (100 billion yen) by the end of the fiscal year ending March 31, 2010.
Today's moves follow on already Sony's undertaken short-term measures, including adjusting production, lowering inventory levels, and reducing operational expenses.
The restructuring also comes during an especially cold holiday season for the consumer electronics market. Indeed, the Consumer Electronics Association last week lowered its Q4 sales growth estimate for wholesale consumer electronics spending to a mere 0.1% over the 2007 quarter, a far cry from the group's October forecast of 3.5% growth.
Sony plans to provide additional information on the restructuring during its January 2009 fiscal Q3 statement.
