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Tuesday April 10, 2012

Sony to lay off 10,000 workers


New CEO looks to steer the company back to profit

TOKYO: Japan's Sony Corp is to cut 10,000 jobs, about 6% of its workforce, the Nikkei newspaper said, as new chief executive officer Kazuo Hirai looks to steer the electronics and entertainment giant back to profit after four years in the red.

The job cuts would be the latest downsizing in Japan Inc where companies from cellphone maker NEC Corp to electronics firm Panasonic Corp are trimming costs in the face of a strong yen and competition from rivals like Apple and South Korea's Samsung Electronics.

TV makers in particular have been hit hard by the tough business climate as well as sharp price falls, with Sony, Panasonic and Sharp expecting to have lost a combined US$17bil in the fiscal year just ended.

Investors will closely monitor a briefing on Thursday by Hirai, who formally took over this month as CEO from Howard Stringer, for further clues on how Sony plans to revamp its business.

Close watch: Investors will closely monitor a briefing on Thursday by Hirai, who formally took over this month as CEO, for further clues on how Sony plans to revamp its business. — AP

“Under a new CEO, it's easier to cut jobs or go in a new direction,” said Yuuki Sakurai, head of fund manager Fukoku Capital, which had around US$7bil worth of assets under management as of end-March 2011, and which holds a small stake in Sony, according to Reuters data as of last July.

“One of the things I'd like to see is that they shift their resources to other areas outside TVs If they stick to TVs, they may have to fight a war they may not be able to win.”

The Nikkei said half of the latest round of job cuts would come from consolidating the firm's chemicals and small and mid-sized LCD operations.

Sony said last month it was selling a chemical products division, accounting for some 3,000 people, while on April 1 it merged its Sony Mobile display unit, which had about 2,000 workers, with the small LCD panel businesses of Toshiba Corp and Hitachi Ltd into a new firm called Japan Display.

The Nikkei said it was not clear how many of the cuts would take place in Japan or overseas.

As of end-March 2011, Sony had 168,200 employees on a consolidated basis, according to the company's website. - Reuters

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