Sony to ax 10,000 jobs in turnaround bid: Nikkei

TOKYO Mon Apr 9, 2012 12:25pm EDT

1 of 2. A logo of Sony Corp is pictured at an electronic store in Tokyo April 9, 2012. Japan's Sony is to cut 10,000 jobs, about 6 percent of its workforce, the Nikkei newspaper reported on Monday, as new CEO Kazuo Hirai looks to steer the electronics and entertainment giant back to profit after four years in the red.

Credit: Reuters/Yuriko Nakao

Related Topics

TOKYO (Reuters) - Japan's Sony Corp (6758.T) is cutting 10,000 jobs, about 6 percent of its global workforce, the Nikkei newspaper reported on Monday, as new CEO Kazuo Hirai looks to steer the electronics and entertainment giant back to profit after four years in the red.

The job cuts would be the latest downsizing in Japan Inc where companies from cellphone maker NEC Corp (6701.T) to electronics firm Panasonic Corp (6752.T) are trimming costs in the face of a strong yen and competition from rivals like Apple (AAPL.O) and Samsung Electronics (005930.KS).

TV makers in particular have been hit hard by the tough business climate as well as sharp price falls, with Sony, Panasonic and Sharp (6753.T) expecting to have lost a combined $17 billion in the fiscal year just ended.

Investors will closely monitor a briefing on Thursday by Hirai, who formally took over this month as chief executive from Howard Stringer, for further clues on how Sony plans to revamp its business.

"Under a new CEO, it's easier to cut jobs or go in a new direction," said Yuuki Sakurai, head of fund manager Fukoku Capital, which had around $7 billion worth of assets under management as of end-March 2011.

"One of the things I'd like to see is that they shift their resources to other areas outside TVs ... If they stick to TVs, they may have to fight a war they may not be able to win."

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Sony earnings graphic: r.reuters.com/wah46s

Sony staff details: r.reuters.com/kam57s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

The Nikkei said half of the latest round of job cuts would come from consolidating the firm's chemicals and small and midsize LCD operations.

Sony said last month it was selling a chemical products division, accounting for some 3,000 people, while on April 1 it merged its Sony Mobile display unit, which had about 2,000 workers, with the small LCD panel businesses of Toshiba Corp (6502.T) and Hitachi Ltd (6501.T) into a new firm called Japan Display.

The Nikkei said it was not clear how many of the cuts would take place in Japan or overseas.

As of end-March 2011, Sony had 168,200 employees on a consolidated basis, according to the company's website.

Sony may also ask its seven executive directors who served through the fiscal year to end-March, including Stringer, who is now chairman, to return their bonuses, the Nikkei said.

Sony declined to comment on the report.

Sony announced 16,000 job cuts in December 2008 after the global financial crisis battered demand for its products, but it has not managed to make a profit since then.

The company has forecast a 220 billion yen ($2.7 billion) net loss for the fiscal year just ended, hurt in large part by its ailing TV business.

Sony said last month that Hirai would keep direct charge of the TV business as part of a structural reorganization.

Sony shares closed up 0.6 percent, while the benchmark Nikkei average .N225 ended 1.5 percent lower. The stock has dropped more than 10 percent in the past 3 weeks since hitting a 7-month high.

(Reporting by Chris Gallagher; Additional reporting by Shinichi Saoshiro; Editing by Edmund Klamann and Ian Geoghegan)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (3)
VonHell wrote:
The great challenge will be to eliminate the so called cells operating inside Sony.
But he wont succeed… just a old new face to the old problem…
The playstation philosophy? lol …PS was a success on 1st and 2nd generations… PS3 got too late , lots of delays, and the all might cell cpu could not cope with its small 512Mb and the obsolete GF7 derivate GPU by the time it was launched… and now they are going with AMD CPU, which any gamer knows is slower than Intel for games and AMD GPU, that by the way just got owned by the nvidia new generation… to what end? cost? Keep the pride number of “cores and gigaflops” up with inferior hardware?
If PS3 got tough competition from xbox by been too late and not faster… easy to imagine PS4…

Apr 09, 2012 6:57am EDT  --  Report as abuse
jacques42 wrote:
I love my Sony gear. I’ve never had any breakage so much of it is over thirty years old. (my hearing and vision have degraded and so I don’t need the latest greatest)

I would wonder how much they appreciate the thirty percent raise that Apple gave to all the workers in China, by popular demand in the US?

Apr 09, 2012 11:23am EDT  --  Report as abuse
brotherkenny4 wrote:
All old organizations suffer from the same thing. That being management that supports itself. People in management collaborate to advance their careers. That is not the same as evaluating an individuals skill set and advancing them based on their contribution. Eventually this favoritism to the mediocre through collusion of the inepts disincentivises all the capable people and the company or organization is left with really poor upper and middle management. This is what happened to Kodak, GM, Chrysler, and many more and will continue to happen especially for the publically traded companies, since collusive manipulators are actually pretty good at pillaging past successes to give the appearance of performance yet killing all future potential.

Apr 09, 2012 11:49am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video