Sony Cuts 16,000 Jobs Due to Economic Crisis; Facing Slower Growth in the Future?

With the economy continuing it’s long spiral down the toilet this past year, we’ve seen a lot of developers being forced to cancel projects, shuffle their investments, or even close their doors entirely. Now though, it seems that trend has caught up to the big boys in the gaming industry. Sony has now announced that they will be laying off 8,000 workers in their electronics sector between now and March 2010, as well as another 8,000 temporary or contract workers. They also plan to shut down several manufacturing plants across the globe. The company hopes these measures will allow them to reduce costs by $1.1 billion a year during the economic crisis.

Analysts have pointed out that Sony’s financial problems may partly stem from the rising value of the yen compared to the lower value of the US dollar and the Euro. Since 80% of the company’s profits come from overseas, their income has been hit pretty hard. Some analysts are saying cost-cutting measures may not be enough though, such as Katsuhiko Mori, a fund manager at Daiwa SB Investments (and I’m guessing a “glass half-empty kind of guy):

“The number sounds big, but this staff reduction won’t be enough. Sony doesn’t have any core businesses that generate stable profits. After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company.”

The one thing us gamers will probably be keeping an eye on though is how Sony decides to move forward with the PS3 and their whole gaming division. Drastic measures like this could indicate the company isn’t prepared to move forward as quickly with some of their plans. On the other hand, the PS3 is probably one of their most profitable products out right now, so they could just as easily throw most of their support behind it. We shall have to see.

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3 Comments on Sony Cuts 16,000 Jobs Due to Economic Crisis; Facing Slower Growth in the Future?

Sk8man

On December 9, 2008 at 8:42 am

Fanboys in 3…2……..

SpiralGray

On December 9, 2008 at 9:13 am

Here’s the ridiculous thing about this…

They plan to complete the cuts, cuts necessary to weather the financial crisis (an overused word anyway), by 2010. In other words, just about the time we’ll be coming out of the “financial crisis.”

And here I thought CEOs were reasonably intelligent people.

Sk8man

On December 10, 2008 at 7:42 am

@SpiralGray,
I would very much like to borrow your crystal ball. While I hope we are all out of this recession(soon to be depression) by 2010, no one knows for sure.