INSTANT VIEW: Sony to cut thousands of jobs
TOKYO (Reuters) - Japanese electronics maker Sony Corp said it will cut thousands of jobs, scale back investments and pull out of unprofitable businesses as part of restructuring efforts to shave 100 billion yen ($1.1 billion) in costs.
KEY POINTS:
-- Sony to slash investments in electronics operations by about 30 percent from mid-term plan, cut production facilities by about 10 percent from current 57 sites
-- Sony to announce earnings impact from restructuring in January 2009
-- Sony shares have fallen nearly 70 percent since the start of the year
For a graphic on Sony's share price click on:
COMMENTARY:
KIM IK-SANG, ANALYST, HI INVESTMENT & SECURITIES, SEOUL
"The global downturn is weighing on everybody, but Japanese companies suffer more from the yen's strength. Sony will also have to cut product prices to stay competitive.
"Samsung (Electronics Co Ltd) and LG (Electronics) are avoiding job cuts and for now just have some employees on longer year-end holidays. It would cost them more if they cut jobs and try to hire back later.
"Korean companies can wait and see for the time being before they consider more measures. They will suffer less even when Sony starts to cut prices further, as the weaker won gives them more room to cope with that."
TOSHIYUKI MATSUSHITA, CHIEF INVESTMENT OFFICER, BLUEBEAR
INVESTMENT MANAGERS
"The plan did not come as a surprise. Other manufacturers, including Toyota and other carmakers, are most likely to announce restructuring steps along with further cuts in their earnings guidance in the near future.
"Such a timely restructuring effort should normally be a positive factor. But any immediate investor reaction would probably be limited as investors are seeking to determine the degree of further earnings guidance downgrades first." Continued...
