Sony Group is to cut 8,000 jobs – 4 percent of its work force – as part of a cost reduction initiative aimed at saving $1.1 billion a year. Influenced by the global economic downturn and a strong yen, the layoffs are expected to be completed by March 2010.
The company will close several manufacturing plants, reduce investment in electronics and increase its reliance on outsourcing, reports the Associated Press
. The strong yen has been particularly problematic for Sony, who relies on 80 percent of its sales from overseas.
The majority of the job losses will come from Sony’s electronics business, which is considered separate from Sony Computer Entertainment. A fall in demand for flat panel televisions will see plans to boost production reversed, with 10 percent of manufacturing sites to close.
An additional 8,000 temporary jobs will also be cut by March 2010, which are not officially considered part of Sony’s global work force.
Although group senior vice president Naofumi Hara did not mention the company’s games division in his official press address, a Sony Computer Entertainment Europe spokesman did comment on the changes
to UK trade paper MCV: "In order to stay competitive in the accelerating global network environment, we will always carefully review and make structural changes, if necessary, in order to further expand and strengthen the PlayStation business around the world."
Sony Group recently cut its full-year profit projections by 59 percent on the previous year. For the fiscal year ending March 2009, the company is now predicting a reduced ¥150 billion ($1.5bn) profit.