Sony too Realigns Due to Economic Climate

December 9th, 2008 at 12:00 am
 


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Pink slips are all too familiar nowadays and technology companies aren’t immune.

Sony today announced that they will be restructuring, streamlining and enhancing their operational efficiency.  In other words, downsizing, cost cutting and layoffs.

Particularly within its electronics business, where Sony has been most affected by the acute downturn in the economic climate, the company has already undertaken certain short-term measures, including adjusting production, lowering inventory levels, and reducing operational expenses.

Going forward, Sony intends to adjust product pricing to mitigate the impact of the appreciation of the yen, curtail or delay part of its investment plans, and downsize or withdraw from unprofitable or non-core businesses. Furthermore, Sony plans to realign domestic and overseas manufacturing sites, reallocate its workforce and reduce headcount.

Specifically, Sony will be doing three things.  First they will be reviewing their investment plans.  This will consequently lead them to outsource the production of its semiconductors to third parties.  Additionally, they will postpone their plans to increase the assembly of LCD TV’s for the European Market.

Second, they will be closing down some of their factories, "including Sony Dax Technology Center in France, which manufactures tape and other recording media. By further advancing initiatives including rationalizing its manufacturing operations, shifting and aggregating manufacturing to low-cost areas, and utilizing OEM and ODM partners, Sony plans to reduce the total number of manufacturing sites by approximately 10%, from the current total of 57, by March 31, 2010." 

Third, layoffs.  As a result of these measures, by March 31, 2010, Sony plans to reduce headcount in the electronics business worldwide by approximately 8,000, out of approximately 160,000 as of September 30, 2008. At the same time, Sony plans to reduce headcount in its seasonal and temporary workforces.

Oh well, what’s new?  We’ve been hearing this from other companies.  The scary thing now it’s Sony.