Sony to lay off 5,000 jobs

News had leaked that Sony is preparing to slash 10,000 jobs, about 6 percent of its global workforce, as part of a new restructuring plan. Half of the cuts come from previously announced deals, including the sale of a chemicals subsidiary to the Development Bank of Japan, and the spin off of the production of small LCD panels into a joint venture with Hitachi and Toshiba. The 5,000 people employed by these two businesses will no longer be on Sony's payroll after the deal, but most of them shouldn't be out of a job.

The other 5,000 jobs cuts are mostly expected to come from Sony's TV division, which has been in the red for eight years. The electronics giant plans to drastically scale back its TV production, from 40 million to 20 million units, and will realign the workforce with the new production target.

The rest of the reductions are expected to come from Sony’s chronically unprofitable television division, which is undergoing an overhaul that analysts say will be crucial to restoring the company’s financial health. Sony estimates that it suffered an overall net loss of Y220bn ($2.7bn) in the financial year that ended on March 31.

In November, Sony slashed its medium-term sales target for LCD TVs by half, from 40m to 20m, giving up on an ambitious goal it had set only in 2009. The business has been in the red for the past eight years.

“We’re lowering production, so naturally we have to realign the workforce with our new goals,” one person briefed on the plans said. Sony declined to comment.

Source: FT