Desperate times call for desperate measures and Sony’s response to the Global economic slowdown and its own downturn in fortunes over the last year is to make 8,000 employees redundant by March 2010 – approximately 5 percent of its global workforce.
Currently it’s unknown which of Sony divisions will see the cutbacks, but initial reports state that its core electronics sector, which currently makes up 160,000 of Sony’s worldwide workforce of 185,000, will suffer the most. Redundancies are expected to be completed before the end of March 2010 with the company also planning to close down 10 percent of its manufacturing sites.
"Through these and other measures, it aims to generate annual costs savings of about 100 billion yen ($1.1bn) by the end of the next financial year to March 2010," claims Sky news.
Despite this, analysts are predicting that this won’t improve Sony’s balance sheet and suggest that there could be worse to come.
"The number sounds big, but this staff reduction won’t be enough," Katsuhiko Mori at Daiwa SB Investments, told Reuters. "Sony doesn’t have any core businesses that generate stable profits. "After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company."
The drastic measures follow the electronic giant’s decision to halve its annual operating profit forecast in October due to stiff competition and lack of consumer demand. With Sony shares falling by up to 70 percent this year, it’s going to be very interesting to see what measures the Japanese giant will take to dig it out of the mire during its third quarter results filing in January 2009.