Sony to Cut 8,000 Jobs

Sony is to cut 8,000 jobs worldwide and close several factories in an attempt to save $1.1bn (£745m) a year as the global economic slowdown forces another Japanese corporate giant to take crisis measures.

The firm said the job losses, the biggest announced by an Asian firm so far in the current crisis, would come in its core electronics division, but did not offer a country breakdown of the cuts.

About 160,000 of Sony's global workforce of 185,000 are employed in the division. It manufactures a wide range of products including flat-screen televisions, personal audio players and digital cameras, and has suffered from the slowdown in consumer demand.

Sony said the redundancies would be completed by the end of March 2010 along with a 10% reduction of global manufacturing sites from the current total of 57. The firm also plans to slash investment in electronics operations by 30% from its mid-term plan.

The job cuts announced today comprise about 4% of the company's global workforce.

Sony has already lowered inventories and cut production, in line with other Japanese exporters hit by weak exports to the US and Europe, and the strength of the yen against all other major currencies.

It recently said it would end production at a factory in France that makes tape and other recording media, and would shift more electronics production to lower-cost areas.

"These initiatives are in response to the sudden and rapid changes in the global economic environment," Sony said in a statement.

But some analysts doubted if the measures would be enough to improve Sony's balance sheet.

"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."

Falling prices, increased competition and poor consumer demand in key markets forced Sony to cut its annual profit forecast by more than half in October.

The firm's shares have fallen nearly 70% this year, as the yen's rapid appreciation against the dollar and the euro ate into profits from products sold in the US and Europe.

Sony said it would reveal the financial impact of its restructuring measures when it announces its third-quarter results in January next year.