Sony to cut 16000 jobs as global recession curbs demand

Sony, the world's second-biggest consumer-electronics maker, plans to eliminate 16,000 jobs in the largest reduction announced by a Japanese company since the credit crunch drove the world into recession. Sony will curb investments, outsource production and move away from unprofitable businesses by March 2010 to save more than 100 billion yen ($1.1 billion) a year, the company said today [9 Dec 2008]. The cuts include 8,000 full-time employees and another 8,000 part-time and seasonal workers.

The reductions highlight the severity of the slump in consumer spending at a time when companies typically focus on the peak Christmas shopping season. Sony CEO Howard Stringer said a "much" larger-than-anticipated deterioration in the economy spurred the measures. This is the second round of mass layoffs since 2005, when he announced plans to eliminate 10,000 workers. Panasonic, the world's biggest consumer-electronics maker, cut its full-year profit outlook by 90%. Faltering consumer spending led companies including AT&T and DuPont to announce more than 15,000 job cuts this month. The number of people on jobless benefit rolls in the US climbed to a 26-year high in the week ended Nov. 22.

- If this were a bank, that would have been pretty much par for the course. But this is Sony, and this is the Christmas season. Not good. Making things worse was the initial confusion surrounding this announcement, when it was first announced that the cuts would be 8000 temporary/contract workers and then subsequently we found that it had been amended to that plus another 8000 full-time workers, making for a total of 16000. This speaks to me of confusion among the top ranks. Not good at all.

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