| One of the leading Japanese manufacturers of consumer electronics, Sony Corporation, has planned massive staff cuts. According to the country's leading financial newspaper Nihon Keizai Shimbun, by 2006 the company will lay off 15 to 20 thousand specialists. The announced figures look shocking for such a giant - the company's total staff numbers 160 thousand people. The corporation's press service confirms this information, but with some reservations. “We are going to exit unprofitable businesses, get rid of non-strategic assets, reorganize global production, reduce back office staff, especially in Japan,” said company spokesman Shiginori Yoshida, without giving any exact details. In its official statement, the company refused to comment at all on the newspaper's report, saying that it was based solely on speculation.
At the same time, Sony announced that on October 28 it is going to present its new development strategy and plan for the upcoming restructuring. Some employees of the corporation, who prefer not to identify themselves, made it clear that serious changes are coming to the corporation. "Layoffs and plant closures will happen eventually," one Sony employee told Reuters, "but details such as when the plants will close have not yet been finalized."
Discussions about upcoming layoffs in the corporation have been going on for a long time. The company's chief financial officer, Takao Yuhara, announced back in July that the company was incurring large losses due to falling prices and this would inevitably lead to a global reduction in the number of personnel at the company's factories. According to experts, the corporation was never able to restore its previous positions after announcing serious losses in mid-spring. Then Sony's quarterly losses amounted to almost a billion dollars. The ensuing panic among investors was the main reason for the current cuts.
Analysts believe Sony has struggled to keep up with ever-changing consumer demand in recent times. Being a leader among TV manufacturers, the company's strategists were unable to focus on increasing the production of LCD screens in time and lost a significant part of the market. With high production rates, a drop in the popularity of some products inevitably led to an accumulation of products in the company's warehouses, which also negatively affected the release of new products. Another factor that influenced the decline in the company’s profits was the global economic crisis, which affected not only Sony’s homeland, but also the main markets for the sale of its products. For example, in the United States, the economic downturn led to an avalanche-like decline in company sales.
However, the Japanese manufacturer does not intend to give up and hopes to regain lost ground as soon as possible. To this end, as the publication reports, the corporation is ready to organize a joint venture with the South Korean company Samsung to produce liquid crystal monitors for televisions. Analysts view Sony's new strategy as the only correct move in such a situation. “Consumer electronics manufacturers are forced to cut costs because it has become very difficult to increase sales,” said one of the leading managers of Chuo Mitsui Asset Management Co. Chuo Mitsui. His opinion is shared by Japanese analysts Kiyotaka Teranishi and Ryohei Masunoto. “We have already spoken more than once about our confidence in the company’s great potential for long-term growth. The restructuring program is a step in the right direction,” says Mr. Teranisi. Denis UVAROV
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