Sony to cut 8,000 jobs

Japanese electronics giant moves to reduce costs as global financial crisis bites.

    Sony's  job cuts are the biggest by an Asian company so far in the current economic crisis [GALLO/GETTY]

    "The number sounds big, but this staff reduction won't be enough. Sony doesn't have any core businesses that generate stable profits," Katsuhiko Mori, a fund manager at Daiwa SB Investments, said.

    "After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company."

    Sony said it would delay plans to boost output for liquid crystal display TVs in Slovakia, cut capital spending on semiconductors, and reduce the number of manufacturing sites by about 10 per cent.

    Recession

    Like every other big consumer goods brand, Sony faces a bleak Christmas shopping season as the financial crisis grows into a broad recession that has already engulfed the United States, parts of Europe and its home market in Japan.

    Japanese manufacturers have also been damaged by a surging yen, with the currency's rise to 13 year highs this year cutting into the value of their earnings and making exports less competitive.

    Japan, the world's second largest economy, also fell into a deeper recession as exports weakened, domestic demand fell and Japanese companies, bracing for a prolonged downturn, reduced inventories.

    The Bank of Japan recently slashed its projection for economic growth to just 0.1 per cent for the year through March, compared with the 1.2 per cent projected in July. 

    SOURCE: Agencies


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