Sony Job Cuts: Japanese Electronics Giant Reportedly Plans To Slash 10,000 Jobs In Turnaround Bid

* Jobs could go as early as this year

* Chemicals, LCD ops to account for half the cuts

* Seven execs may be asked to hand back bonuses - Nikkei

* Sony shares close up 0.6 pct, market drops 1.5 pct

By Chris Gallagher

TOKYO, April 9 (Reuters) - Japan's Sony Corp 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.

The job cuts would be the latest downsizing in Japan Inc where companies from cellphone maker NEC Corp to electronics firm Panasonic Corp are trimming costs in the face of a strong yen and competition from rivals like Apple and South Korea's Samsung Electronics.

TV makers in particular have been hit hard by the tough business climate as well as sharp price falls, with Sony, Panasonic and Sharp 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, and which holds a small stake in Sony, according to Reuters data as of last July.

"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."




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 and Hitachi Ltd 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 reorganisation.

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

Comments

[pbgardenpet]

10:09 AM on 04/10/2012

This is another part of obama's failed job plan.

[strato46]

11:22 AM on 04/10/2012

What are you babbling about ? Reread the article. It's happening in JAPAN, partly due to competition from Samsung in South Korea and Apple,.... an AMERICAN corporation..........or were you just in a hurry to get in a political dig...... It gets REALLY old.

[LaughingTwo]

08:36 AM on 04/10/2012

LOVE Sony products but they REALLY do need to lower prices if they want to seriously compete with other brands.
They haven't tried the Kodak way yet - declaring bankruptcy while giving $13 million in bonuses to execs (on their way out the door?)

[florencebrady]

01:32 AM on 04/10/2012

Read some of the "expert" economists stories in the early 1980's. They were so concerned with Japan taking over the American economy. Sony and Honda being the "scariest"

The only product associated with "China" were the patterns you chose for dinner parties.

[kayyy]

12:44 AM on 04/10/2012

If the top 1/4th of the company would give up their benefits and 1/2 of their salary, I would be more compassionate about the situation.

[tepeko]

12:29 AM on 04/10/2012

This can't be true! Obama told me the economy was getting better!

[starchildjg24]

01:00 AM on 04/10/2012

The Japanese economy took a major hit after the nuclear plant disaster, and the destruction from the storm. I don't recall President Obama saying much about their economy.

[florencebrady]

01:32 AM on 04/10/2012

LOL

[lghiata]

11:32 PM on 04/09/2012

Sony makes great products but they are over-priced. For a long time Sony was a preferred name brand. It was a status brand! Yet Sony didn't seem to notice that their competition's quality was becoming comparable. They also didn't seem to notice that many of their competitors had lower prices. Now Sony isn't the top dog any more.

[kayyy]

12:33 AM on 04/10/2012

Rancho Bernardo, Ca. in the 90's Sony was paying Labor the lowest possible, even running them thru some temp agencies in the San Diego area just to cut costs. They were charging higher end prices for products that acually cost very little to make.

It's sad that there is no reasonable business model left that could give good products/ services to people being paid decent wages at an honest profit.

[Jstoke]

03:18 AM on 04/10/2012

It's like how Apple Iphone costs $400 when it comes out when you can make one at $70-$90. Most companies do it.

[pbgardenpet]

10:11 AM on 04/10/2012

Most companies use temp. agencies these days to save money which is a smart way of doing business.

[tomkellycartoons]

11:25 PM on 04/09/2012

We read "10,000 jobs" and say "tsk, tsk," or 'this economy" or whatever other remark that comes to mind, but here's what gets me:

No matter the right or wrong of the situation, or why it is the way it is, these are 10,000 real people who are about to be very stressed. 10,000 mothers, fathers and others who will still need to find a way to pay rent, food, school clothes and (for some) insurance. That's not even considering the (god forbid) treats and nice little things we all enjoy and love to provide for our kids.

10,000 people who will have to go home, look in the mirror...all alone...and ask, "What am I going to do NOW?"

10,000 people, many of whom will wake up in the night with worry and trepidation.

The misery of it all simply stuns me.

God help us all.....

[Trisha66]

11:39 PM on 04/09/2012

We do worry about those people and HAVE worried about everyone since the 1st lay off. There is nothing we can do. Do you have a job for them? I dont. And I have to say to you that with the current sense of "entitlement" our kids have here, the treats really arent such a big deal. They should learn to love, not use, parents. And here is a way they may learn it since none of us have had the gumption to say NO when we should. They may finally get the same opportunity to know what it feels like to work for something & appreciate it like we had. Im far more concerned about the food, clothes, basic needs, health care etc... of ALL of us around the globe right now.

[starchildjg24]

12:41 AM on 04/10/2012

So you want those 10000 Japanese people to immigrate to the US? What the heck are you people talking about. I've just read a bunch of posts that make no sense at all. My kids have worked since they turned 15, I don't know about your kids, and I surely don't know about those Japanese people's kids!

[starchildjg24]

01:03 AM on 04/10/2012

Most every country in the world is having economic problems. I feel sorry for these Japanese people, but you can only dwell on so many problems. I mean, what about Somalia? I think we had better concentrate our energies on our own economy. This is just one company in Japan, I don't know what the unemployment rate is like there. I guess I should research it, I hate not knowing things.

[zackeryrichards]

10:38 PM on 04/09/2012

To clear up some of the "typical Republican B.S." that has been posted on here: The
U.S. Corporate tax rate is the LOWEST it has been in 30 years!! And overall the U.S.
tax rate lags FAR behind most developed Countries. Americas big corporations have
their manufacturing plants over-seas so they can operate on "slave labor" and make
HUGE profits and NOT because of the U.S. tax rate (hell, 2/3rds of America's BIG
corporations DON'T PAY ANY TAX AT ALL!!) And the American DEDT is the result
of the BUSH Administration & the Republicans. Two thirds of the current debt was
the 9 TRILLION Bush gave the Wall Street Banksters. The stimulus money Obama
spent was necessitated by the catastophic MESS Bush left the Country in and had
it NOT been spent, millions of us would be standing in soup lines today and America
would be in a depression worst than the one of the 30s. You are paying $4 for gas
because BUSH "de-regulated" Oil Futures and allowed Wall Street Speculators to
controll the price of oil. This has choked our economy and continues to hamper a
recovery. Boehner has "sat on" the imigration bill for six months denying Americans
7 million jobs because (Quote) "If it passes, it might look bad on the Republicans".
So there you have the facts . . . . if you want to listen to the B.S. you will make ole
Boehner's day!!!

[odelly]

10:35 PM on 04/09/2012

why is it always the working people,the real people who actually are the company,and not big salaries at the top who are acually useless?

[TheReader2011]

10:22 PM on 04/09/2012

Sony is quality but also costly. These days many buy cheaper leaving Sony behind and go with no name brand which their wallet can afford. So sales are totally down, henche, make it affordable and save jobs.

[odelly]

10:36 PM on 04/09/2012

if they made it affordable they couldn't pay those useless ceo's

[Trisha66]

11:41 PM on 04/09/2012

Thats also why they are cutting 10,000 jobs. To make sure the CEOs have their $$.

[bdgrizcp]

10:22 PM on 04/09/2012

Amazing how fast today technology goes from cutting edge to old news. Sony stayed in hardware, and hardware max'd out. There is no doubt that Sony makes great products, their misses are the stuff of legend but their products last. It's just that the products they make are no longer hip, hot, or coveted by the nerdniks and technogeeks so away they go. Tip of the iceberg? Probably.

[Tquin]

09:54 PM on 04/09/2012

Sony will cut 9,500 jobs in the USA and 500 in Japan. Special deal with Obama.

[starchildjg24]

01:06 AM on 04/10/2012

This article is about jobs that are being cut in Japan. Nothing to do with the US. Try reading more carefully. Sony is facing downsizing due to competition. President Obama is not involved.

[yoyodyne666]

04:38 AM on 04/10/2012

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

[ahetty2000]

09:23 PM on 04/09/2012

Never fear. The Playstatioin 4 will save Sony!!

[mashtoe]

08:43 PM on 04/09/2012

When Sony Music people started to take over that was the beginning of the end. I was there. Sony Music was full of lawyers and beancounters. So engineers were sidelined.

[mashtoe]

08:38 PM on 04/09/2012

And now can we talk about ending H-1b work visas?!