Sony to cut 10,000 jobs worldwide

Sony Corporation today said it will cut 10,000 jobs globally, slash the number of factories and cut costs by 200 billion yen (€1.46bn) in an ambitious restructuring bid to revive its stumbling electronics business.

The Japanese company – under new management since March – said it expected a group net loss of 10 billion yen (€74m) in the current fiscal year as the plunging prices of consumer electronics products had taken a hefty toll on earnings.

The changes, to be put in place by the end of fiscal 2007, which runs through March 2008, would result in a reduction of 4,000 workers in Japan and 6,000 elsewhere, while factories would be cut from the present 65 to 54, company officials said.

The bold turnaround plan comes under the fresh leadership of Howard Stringer, an American-British dual citizen who was named chief executive of the Japanese electronics and entertainment company in March as the first foreigner to head Sony Corporation.

Sony has lost money in its electronics sector for two straight fiscal years, and has relied on its movie division including the popular Spider-Man series and its successful PlayStation consoles in its computer video-game unit to lift profits in recent years.

Sony, known as a pioneer in electronics first with the transistor radio and then the Walkman portable music players, has seen some of its glory dimmed by Asian rivals like Samsung that are offering cheaper prices.

It has been criticised as falling behind in slimmer TV models, such as liquid-crystal and plasma display sets, that are increasing popular around the world, losing market share to relative Japanese newcomer Sharp as well as old-time rival Matsushita which makes Panasonic brand goods.

Sony also fell behind Apple’s iPod in what should have been its forte - portable music players – clinging to CD and MD formats and its own proprietary, but unpopular, format for digital music files.

The iPod models are proving a big hit in Japan, where Apple began its iTunes store in August to rave reviews.

Over the past five years, Sony shares have lost two-thirds of their value.