Sony closes Japan factory; cuts 2,000 jobs

Sony closes Japan factory; cuts 2,000 jobs

Summary: The consumer electronics giant has cut another 2,000 jobs in Japan as the firm continues its battle against a cash hemorrhaging problem after weaker than expected first-quarter results.

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Beleaguered electronics maker Sony will cut 2,000 more jobs at its Tokyo headquarters by March 2013 as the firm continues to restructure its operations to remain competitive in the market. 

Sony is investing in an early retirement scheme that will see around 20 percent of the firm's headcount -- around 2,000 jobs -- at its Tokyo headquarters reduced by the end of the fiscal year in the coming April. 

Sony's Minokamo factory, which produces camera and mobile phone lenses, and also offers customer services for the firm's Sony Mobile division, will also face cuts. The firm said 840 employees will lose their jobs at the plant. Sony will transfer some activities out of the Minokamo site but skipped on much of the detail. 

Sony said in a statement that the efforts stem back to April when the struggling firm announced it would kickstart its 'revival' plan by cutting 10,000 workers across its global business, including approximately 3,000 in Japan. The restructuring efforts would cost Sony $926 million during this financial year; a small price to pay for a shot at economic certainty in the near future.

The electronics giant said the restructuring will save the company about $378 million annually from the next fiscal year this coming April, but will likely have a minimal effect on the firm's annual earnings results. 

As the firm continues to bleed cash from its very pores, Sony is refocusing its product line efforts on three key areas: gaming consoles, digital imaging, but also crucially, mobile devices. 

Since the joint venture between Sony and Ericsson came to a close following a $1.5 billion all-cash buyout from Sony a year ago, much of the firm's focus has been on getting the new division Sony Mobile on its feet. With that, the Sweden-based operations relocated back to the mothership in Tokyo, shedding a further 1,000 jobs in the process. 

The mobile division, a wholly owned subsidiary of Sony Corp., gained 133 percent year-on-year in the firm's first-quarter earnings earlier this year, but largely due to the fact that the mobile unit did not actually exist a year ago.  

Updated at 8:30 a.m. ET: Sony will save, not lose, about $378 million in restructuring.

Topics: Tech Industry, Hardware, Mobility, Smartphones

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