Sony Will Cut 16,000 Jobs as Recession Curbs Demand
Dec. 9 (Bloomberg) -- Sony Corp. plans to eliminate 16,000 jobs in the largest reduction announced by a Japanese company since the credit crunch drove the world into a recession.
Sony will curb investments, outsource production and move away from unprofitable businesses by March 2010, as part of plans to save more than 100 billion yen ($1.1 billion) a year, the Tokyo-based company said today.
The job eliminations will take place in the electronics division and include 8,000 contract workers, it said.
Weak Demand
Faltering consumer spending led companies including AT&T Inc and DuPont Co. to announce more than 15,000 job cuts this month. The number of people on jobless benefit rolls in the U.S., one of the biggest markets for Asian exporters including Sony and Panasonic, climbed to a 26-year high in the week ended Nov. 22.
All reductions will take place by March 31, 2010, Sony said. The 8,000 full-time employees to be cut represent about 5 percent of the company’s workforce in the electronics division. Hara declined to provide the number of people on contract.
The reductions highlight the severity of the slump in consumer spending at a time when companies typically focus on the peak Christmas shopping season. Sony, the world’s second-largest maker of consumer electronics, said a “much larger” than anticipated deterioration in the economy spurred the cuts and the company may revise its mid-term targets.
Panasonic Corp., the world’s biggest consumer-electronics maker, cut its full-year net income outlook by 90 percent Nov. 27.
The Bravia-brand TV maker said it will “adjust” pricing to cope with the stronger yen, two weeks after saying it didn’t have plans for “massive cuts” in prices in the U.S.
The yen has surged 21 percent against the dollar and 39 percent versus the euro this year, damping the value of Sony’s earnings from overseas
