Sony Set To Shed 10,000 Jobs, First Loss In A Decade Expected News
Chris Leyton
22/09/2005
Sony Corp expects its first operating loss in more than a decade as the CELL processor takes on increased importance...
Sony Corporation today announced plans to cut 10,000 jobs as the electronic giant forecast its first loss in more than a decade. Citing increased competition from Apple Computer Inc. and Samsung Electronics Co. in the music and television market, the worldâs second largest electronic maker aims to shed 6.6% of its workforce by March 2008 and shut 11 of its factories.
Reversing a profit forecast in July, Chief Executive Officer Howard Stringer predicted a 10 billion yen (£50 million) annual loss. Besides the cost-cutting measures, Sony Corp intends to invest more in mobile gadgets, chips and TVs to stem some of the losses made to its rivals.
Sony is currently in a three-year restructuring plan aimed to trim 200 billion yen of costs, whilst Stringer confirmed that the company will sell 120 billion yen of assets including real estate and lower the number of its products by 20%. Sony Corp expects an operating profit margin of 5% by 2008, compared with 1.6% at the end of March 2005.
The CELL processor behind the Playstation3 will take on increased importance to Sony Corp, with plans to create a new division for the processor which will report directly to Stringer.