The tough global economic climate dealt another one-two combination to the electronics and technology sector today, with manufacturing giant Sony announcing today it plans to cut some 16,000 jobs, roll back its investments, and pull out of businesses in a bid to save roughly $1.1 billion per year going forward. The job cuts will impact approximately 8,000 salaried workers—roughly 4 percent of the company’s worldwide workforce—as well as an equal number of contract and temporary staffers. Sony will also close approximately 10 percent of its manufacturing facilities and scale back its investments in electronics technology by 30 percent.
Sony’s cutbacks represent the latest reductions announced by an Asian business so far during the current global economic crises…and some industry watchers are skeptical the moves will be bold enough to shore up the company’s bottom line. The cutbacks also carry longer-term risks, since the company plans to cut back investments that fuel future growth.
Sony’s businesses span a dizzying array of industries, from familiar products like televisions, computer, and cameras to semiconductors, insurance, and the Sony Pictures movie studio.
Sony’s shares have fallen nearly 70 percent this year; in October, the company cut its forecasted annual profit in half, citing slacking sales of televisions and digital cameras, as well as the impact of a stronger Japanese yen.
Sony isn’t the only Asian firm being battered by the economic downturn: Panasonic lowered its earnings forecast earlier this month, while South Korean giant Samsung has announced it is cutting back on capital investments.
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