Sony to layoff 16,000 employees, loses charm among consumers

Sony to layoff 16,000 employees, loses charm among consumers

Summary: Is Sony losing its charm?The world's second-biggest consumer electronics maker plans to eliminate 16,000 jobs -- making it the largest reduction announced by a Japanese company since the credit crunch spurred a global recession, according to the Bloomberg wire.

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Sony Financial ServicesIs Sony losing its charm?

The world's second-biggest consumer electronics maker plans to eliminate 16,000 jobs -- making it the largest reduction announced by a Japanese company since the credit crunch spurred a global recession, according to the Bloomberg wire.

According to the report, Sony will curb investments, outsource production and move away from unprofitable businesses by March 2010 to save more than 100 billion yen (approx. $1.1 billion) a year, the company said in a statement today.

The cuts include 8,000 full-time employees, or roughly 5 percent of the company's electronics workforce, and another 8,000 part-time and seasonal workers, Sony said. The job reductions beyond full-time employees will affect subcontractors, seasonal workers and people hired on a daily, weekly or monthly basis, according to company spokeswoman Mami Imada. Temporary workers typically don’t get the same benefits Sony’s full-time workers receive, she said.

Such measures have been taken by Sony before: In 2005, when the company projected its first annual loss in more than a decade, Sony announced plans to eliminate 10,000 workers.

Sony said it may revise its profit targets as well, and that it will announce the financial effect of the measures in January when it reports fiscal third-quarter results.

ZDNet editor-in-chief Larry Dignan says the changes won't really fix most of the company's woes.

On Oct. 23, Sony said that net income will probably drop 59 percent in the year ending March 31, reducing the outlook by 38 percent as the stronger yen and slumping demand undermine sales of its electronics including Bravia televisions.

Sony faces no problem with cash flow, and plans to invest 30 percent less in its electronics business than planned under its mid-term strategy, without giving figures. It will also cut its 57 manufacturing sites by 10 percent by the end of next fiscal year, and postpone investment plans at its Nitra plant in Slovakia that assembles LCD televisions for the European market.

Topics: Hardware, CXO, IT Employment

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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  • "... loses charm among consumers"

    Although I have loved every Sony product I ever bought and had an extremely good experience with Sony depot repair recently when, after fifteen years of trouble-free service, a stereo I have needed work, I quit buying Sony in 2005 in response to the BMG rootkit fiasco --- not so much because I feared what might be included in a Sony product but because I was outraged by their corporate arrogance.

    It reminded me of Intel's initial reaction in 1994 to their FDIV bug where they said, essentially, "If you can prove to us that you're affected by the bug, we'll replace the Intel product you bought with one that doesn't have the problem." After that, I didn't buy Intel for probably a decade or so.

    When you start up a Sony DVD you get more legal notices than you do on any other distributor's, don't you? The lawyers have too much power in this company.

    I think all of these kinds of things are evidence of companies that regard their customers as an inconvenience. Sony, it seems, also considers us to be the enemy. It would be sad if products as good as Sony's weren't available, but I think they deserve to be taken down a notch or two.
    JRElliott
    • Ditto

      Ditto
      bruceslog
  • Couldnt agree more. Now that the cash isnt flowing freely..

    lets bring them back to reality.

    As for MS, apple and the rest of the music vendors, i guess they wont learn till bankruptcy comes a nockin.
    Been_Done_Before
  • RE: Sony to layoff 16,000 employees, loses charm among consumers

    Big electronics companies all have a common problem, creeping bureaucracy. Engineers draw schematics, CAD guys make circuit boards, and mechanicals wrap the boards in pretty plastic. Software guys write programs for the finished product. The problem is that the members of this group at an old established company are less than 5% of the total workforce. You may know the useless 95% by the title of the dreaded "Program Manager", whose only purpose is to make pretty viewgraphs to show how much money a company is loosing.
    tburzio
  • RE: Sony to layoff 16,000 employees, loses charm among consumers

    Sony is a great company with a track record of innovative, high quality electronics products. The Sony Trinitron was the go-to brand for quality CRTs and TVs for over 20 years. The Walkman revolutionized the way people listen to the radio. Now with Blu-Ray they are offering a revolution in the way entertainment is delivered. I think their future is rosy - economic downturns are a fact of life. A great, dynamic company like Sony will not be permanently affected by this temporary slowdown. The economic problems we face today are caused by years of stupid management by overpaid American executives. Where is the much vaunted American ingenuity practiced today? By American engineers in Japanese owned and managed companies.
  • Love to see Sony fold

    Their embrace of DRM is nauseating. From rootkits to priority formats to locked DVD's, their focus is clear. At the drop of a hat, they would screw the consumer to protect their content. Comes from merging an electronics firm and a content firm. I can't trust their hardware. I would not be surprised if one day, they sell hard drives and cards that cannot store copyright materials, or other such nonsense.
    kurio99
    • Ditto

      ditto
      bruceslog
    • I don't

      I want them to take a deep honest look at the causes of their problems and make effective changes. When they again focus on their customer and think outside of the box when technology changes, they can once again be a great company.
      mystic100
    • you are right on

      And it is especially irritating when you consider that Sony developed many of the technologies to allow the consumer to copy music and videos, such as CDRs, DVDRs, mini-discs, betamax.
      And after they vertically integrate and buy a content company, they want you to stop using the machinery they sold to you.
      What hypocrisy!
      pinecone69
  • RE: Sony to layoff 16,000 employees, loses charm among consumers

    Glad to hear they are feeling the pain especially when they sell products that break in no time and have a totally useless customer service approach. Don't buy Sony is my motto.
    jonathan.greenwood@...
    • I agree

      ditto
      bruceslog
  • RE: Sony to layoff 16,000 employees, loses charm among consumers

    Lousy customer service = no customers.

    I had a problem with their SecuROM blocking software that had nothing to do with Sony (it was a lot older than securom).
    No phone support, 5 days to respond to an email, and no solution offered.

    I've had problems with trying to get help on their electronics (digital camera) as well.

    The whole atmosphere of thier customer service is "We don't care!"
    Cerebral*Origami
  • With their customer service, I'm not surprised.

    About 4 years ago I bought an admittedly low end cd player for my daughter. When we had some problems, I got so frustrated trying to get past their automated customer service answering system, that I swore I'd never buy another Sony product. I've stuck with it so far. I'm sorry for the employees, but can't help but think their p**s-poor customer service played a large part in it.
    garys5604
    • Agreed

      Sony bites
      bruceslog
  • too many armchair no nothing quarterbacks

    Sony haters unite over information they cannot
    possibly understand nor should they. Welcome to the
    Internet where your ignorance is bliss.
    scole3@...
    • What don't we understand?

      What don't we understand? That Sony is having tough times right now for various reasons. Some people have mentioned that customer service has gone downhill over the years. In an industry that has a lot of competition, it is very easy to buy from another company if you get burned. Sure, the economy takes its toll, but Sony has also shot themselves in the foot on more than one occasion.

      Sony has botched several large projects such as the very late, overpriced Playstation 3 (initially priced at $599), Blu-Ray, and dragging their feet when digital music became popular. In addition, Sony has been in the news concerning their batteries causing laptops and other electronic products to burst into flames.

      Combine this with the root kit fiasco, and being part of the group of music moguls (RIAA) who have little regard for their customers and prefer to sue them rather than work with them to create a product/service that people actually want. While they are suing their customers, how much are they paying their artists? It isn't very much.

      I have not bought a Sony product since the rootkit fiasco and have told everyone I know about it. Whenever I am in a store and the salesperson shows me a Sony product, I always tell them why I won't buy a Sony product and have them show me something else. I'm not the only one who boycotts Sony and maybe their arrogance and "damn the customer" reputation is catching up with them.
      mystic100
    • spell right

      You mean "know nothing" not "no nothing".
      If you wish to criticize someone for being ignorant, at least learn to spell like a fifth grader.

      For your information, my dislike of Sony is quite well informed. If you can't give a rational reason other than calling names, keep your opinion to yourself, please.
      pinecone69
  • I know I won't buy Sony anymore....

    Sony in the 70's and 80's before they offshored their manufacturing were superior to their competitors.
    Now if you buy a Sony CD or DVD player expect it to last about a year (just past the warranty) then malfunction. Then when you try to get the parts after paying for a service manual you'll find that the parts are more than half the cost of the device.

    Since Sony has gone to their "throw-away" model I decided there was absolutely no reason to pay a premium for the name, and you do.

    I would buy a Samsung over a Sony anyday.

    Just on principle because I have been "burned" by them more than once I absolutely refuse to buy anything with the Sony name on it.
    dunn@...
    • Kind of like Ford, GM and Chrysler

      Except that they haven't made quality products since the very early 70's. Definitely why I haven't visited a Ford dealership since being burned in '93.
      rrossr
  • It's about time they crashed and burned

    This is the best news about Sony I've seen in recent times.
    It's unfortunate for those workers, but that arrogant company needs to DIAF, kinda like their batteries they pawn off on others.
    martian@...