Sony is feeling the pinch of the current recession (I presume we're allowed to call it that by now) too. Yesterday saw the announcement by the company of plans to cut its permanent workforce by 8,000 employees, five per cent of its 160,000 total workers, as part of plans "to strengthen its corporate structure and bolster profitability across the Sony Group."
According to Bloomberg another 8,000 non-full time staff will also be included in the cuts, bringing the total headcount reduction Sony is announcing up to 16,000. The plans are to be put into plan running up to 2010, so there's a year or so for anyone with their head on the chopping board to pack their desk.
In addition to these staff cuts, Sony will also be introducing a number of money saving initiatives, overall intending "to establish a corporate structure capable of delivering estimated total annual cost savings of more than 100 billion yen by the end of the fiscal year ending March 31, 2010"
On of these initiatives is the cutting of investment spending, in one case by outsourcing planned manufacturing of CMOS sensors to third party manufacturers. Another move will see plans to expand Sony's Slovakia-based Nitra plant, which makes LCD panels. Such measures will apparently see a reduction of 30 per cent in Sony's investment in its electronics business versus its previous mid-term plans.
In the shorter term, Sony will also be ceasing production at two manufacturing plants, one of which will be the French Sony Dax Technology Center, which currently makes recording Sony-branded media.
The full extent of Sony's cost-cutting plans will be detailed in the company's third quarter earnings announcement, scheduled for January 2009. Until then, feel free to speculate to your hearts content about those aspects of this strategy we don't already know.