Sony to axe 8,000 jobs, close factories

As much as six of Sony's 57 manufacturing plants will be closed as part of the restructuring.

Sony plans to cut 8,000 jobs, close factories and reduce electronics investment by nearly a third in response to the current economic conditions, it said Tuesday.

The global restructuring plan will be most felt in the company's core electronics business, which accounts for more than half of the company's sales. As it has done in the past, Sony will downsize or withdraw from unprofitable or non-core businesses.

Five or six of Sony's 57 manufacturing plants will be closed. Only one factory, Sony Dax Technology Center in France, was named on Tuesday but one further factory outside of Japan will be axed along with several others in Japan, said Naofumi Hara, senior vice president of Sony.

The job cuts, which represent about 5 percent of its global workforce, will be worldwide and will be matched by a comparable reduction in the company's seasonal and temporary workforce. Sony didn't go into any further detail on where those cuts would be.

Sony will also delay planned expansion, such as at its Nitra LCD (liquid-crystal display) television factory in Slovakia, and plans to outsource production of some parts including CMOS (complementary metal-oxide semiconductor) image sensors for cell phones.

The company, which is one of Japan's major exporters, has been dealt a double-blow: a recession gripping many of its biggest markets and the strong yen, which makes its products more expensive overseas.

For example, an electronics part that cost the company ¥100 (US$1) to make added $0.92 to the parts bill of a product three months ago on Sept. 9. Today that same part adds $1.08 -- a jump of about 15 percent in three months. Against the Euro the jump is higher. In the competitive electronics market, it's difficult for companies to raise prices, so Sony has been making less profit.

But looking ahead Sony could raise prices in January in response to the yen's strength, said Hara.

Together Sony hopes the measures will save it ¥100 billion (US$1 billion [b]) in its next fiscal year, which runs from April 2009 to March 2010.

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Martyn Williams

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