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Sony To Cut 16,000 Regular And Contract Jobs

12/09/2008 10:06:00 AM Eastern

Tokyo — Sony revealed here Tuesday plans for a major restructuring it said will eliminate 8,000 electronics-related positions and save more than $1.1 billion in annual operating costs, as the company’s electronics operations continue to struggle under the weight of the global economic downturn.

According to the Nikkei business news service, Sony executives held a news conference where they announced the sweeping plan that will shave 8,000 regular positions around the globe by March 31, 2010, the end of the fiscal year, or roughly 4 percent of its workforce. The plan will also close 10 percent of Sony’s 57 production bases and cut another 8,000 temporary and contract staff, among other measures.

According to a company statement, the cost-reduction measures will include: “adjusting production, lowering inventory levels and reducing operational expenses. Going forward, Sony intends to adjust product pricing to mitigate the impact of the appreciation of the yen, curtail or delay part of its investment plans, and downsize or withdraw from unprofitable or non-core businesses. Furthermore, Sony plans to realign domestic and overseas manufacturing sites, reallocate its workforce and reduce headcount.”

The consumer electronics group also said that fiscal 2009 capital spending will be 30 percent less than outlined in its medium-term business plan.

Nikkei reported that Naofumi Hara, Sony senior VP, said the electronics operations may consider revising its long-standing target of an operating profit margin of 5 percent in light of the business slump.