Sony Announces Heavy Cutbacks

Facing an economic crisis that is hitting Japanese electronics companies harder than their American competitors, Sony has announced that it will lay off about 8,000 workers in the coming weeks.

Sony, the Japanese tech giant responsible for the PlayStation 3, Bravia TVs, Blu-ray players, and just about any other type of handy home device you can think of, currently employs about 160,000 full-time workers. However, due to continued economic worries the company plans to lay off a combination of full-time, contract, and temporary employees, totalling about 8,000 cuts.

Sony also plans to tighten up its investments. The company announced that it will postpone or significantly reduce any project or business that it doesn't consider crucial to its overall financial performance. There's no word yet on which projects or current retail products will be affected. One known victim is a liquid crystal display (LCD) television assembly plant in Slovakia; the plant, which was scheduled for expansion, will see those plans postponed indefinitely. (Source: cnet.com)

In total, about ten per cent of the company's 57 plants are expected to close. Two of these expected closures are overseas plants.

In addition, Sony appears ready to outsource other projects, including an increase in the manufacturing of complementary metal oxide semiconductors image sensors, typically used in mobile phones.

If all goes according to plan, the cuts will allow Sony to free up over 100 billion yen, or $1 billion American dollars, by the end of the fiscal year closing March, 2010. "Based on such measures, Sony is planning to reduce investment in the electronics business by approximately 30 percent," the company revealed.

Because of a climbing Yen, Sony and other Japanese firms face an uphill battle against competitors in the United States like Apple and Microsoft. With the American dollar sinking and the Yen climbing every day, American purchases in the Japanese market become less and less cost-efficient. (Source: nytimes.com)