Sony to ax 10,000 jobs, expects $2.7 billion net loss(Tavi S.)

By Reuters

TOKYO — Sony Corp is cutting 10,000 jobs, about 6 percent of its global workforce, the Nikkei newspaper reported on Monday, as new CEO Kazuo Hirai comes under pressure to return the Japanese consumer electronics and entertainment company to profit after four years in the red.

The job cuts are the latest downsizing in Japan Inc where companies from tech names NEC Corp and Sumco Corp to brokerage Daiwa Securities are trimming costs to revamp their businesses.

Sony itself announced in December 2008 cuts of 16,000 workers after the global financial crisis hit demand for its electronics products, but it has not managed to make a profit since then.


As of end-March 2011, Sony had 168,200 employees on a consolidated basis, according to its website.

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The company, which expects a 220 billion yen ($2.7 billion) net loss for the fiscal year just ended, said last month that Hirai would keep direct charge of Sony’s ailing TV business in a reorganization of the company’s business structure.

Hirai, who formally took over as chief executive from Howard Stringer on April 1, is set to brief on the company’s business plan on Thursday.

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The Nikkei said half of the latest round of job cuts would come from consolidating the firm’s chemicals and small and midsize LCD operations.

Sony said last month it would sell part of a chemicals and devices subsidiary that makes films and adhesives used in televisions, cameras and mobile phones to state-backed Development Bank of Japan Inc.

Last year, it merged its small LCD panel business with those 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.

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Sony may also request that its seven executive directors who served through the fiscal year to end-March, including Stringer, who is now chairman, return their bonuses, the Nikkei said without citing its sources.

Sony declined to comment on the report.

Sony shares closed up 0.6 percent, while the benchmark Nikkei average ended 1.5 percent lower.

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About internalmarket

This blog and its accompanying Twitter account have been established as social media learning tools for the Internal Communications and Employee Engagement class at Columbia College Chicago. Through this blog, we will share our observations about current events, change management and employee communications theory, and the application of social media in shaping employee engagement.
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