Sony cuts 10,000 jobs worldwide

Sony is to cut 10,000 jobs worldwide, around 7 per cent of its workforce, and sell more than $1bn of assets in order to reverse its recent disappointing performance.

Chief executive Howard Stringer hopes that the restructuring will give an annual saving of $1bn.

‘Sony and its peers all face tremendous pressure in the marketplace, but we have a sense of urgency and we have a sense of purpose,’ he said at a press conference. ‘We can and will compete vigorously.’

Sony’s has suffered on a number of fronts in the past few years, losing out to Apple in portable music but also to local rivals Matsushita and Sharp in the market for flat screen TVs.

Historically Sony has consisted of entirely separate and almost completely autonomous divisions but this is no longer compatible in an age of digital convergence. It will now centralise decision-making under Ryoji Chubachi, the new electronics CEO.

‘We are going to achieve our goals by breaking down the existing silo walls and eliminating the highly decentralised structure we’ve maintained in the past,’ Stringer explained.

Although the restructuring plans sound drastic, analysts believe that they do not go far enough and that investors will be unimpressed.

‘These are pretty moderate plans,’ Mizuho Securities analyst Koichi Hariya told Reuters. ‘After Sony shares had gained ground in the run-up to today’s announcement, feelings of disappointment may emerge when the market reopens.’

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