Tokyo - Japanese electronics giant Sony Corp on Tuesday announced plans to cut 16,000 jobs worldwide as a result of the global economic crisis. The world's second-largest maker of consumer electronics hopes to save more than 100 billion yen (1.1 billion dollars) with the measure.
It is the largest package of layoffs by a Japanese company since the start of the financial crisis.
The job cuts will affect 8,000 full-time workers, or about 5 per cent of the company's global workforce. The job cuts will include an additional 8,000 part-time workers.
Sony said it was also to close about 10 per cent of its assembly facilities by March 2010. It operates 57 globally.
Planned investments in its electronics division will be trimmed by 30 per cent in the upcoming business year.
The cutbacks come as Sony is facing declining earnings. The company expects profits of 150 billion yen in the year ending March 31, 2009, opposed to its previous target of 240 billion yen. That would be a drop of 59 per cent in relation to the previous year.
Second quarter earnings in the important electronics division sank by about 40.5 per cent to 75.6 billion yen while profits dropped 0.6 per cent to 1.6 billion yen.
Sony had barely begun to implement a painful restructuring this year when it was once again brought to its knees by the rising value of the yen, a price war and the global financial crisis.
Sony makes about 80 per cent of its earnings overseas, as opposed to 50 per cent at competitor Panasonic.
Sony will now take further measures to ward off the worst effects of the crisis. It will begin to adjust product prices to compensate for the strengthening yen. Investment plans will be deferred or dropped altogether, while unprofitable divisions will likely be shuttered or pruned.
The company will shutter its Sony Dax Technology Center in France. Additionally, planned investments in a plant in Nitra, Slovakia, will be delayed.
