TOKYO -- In what it calls the "Big Bang" strategy, Japan's Sony Corp. is cutting 20,000 jobs, or about 13 percent of its global headcount, in the next three years in an effort to slash costs and boost it lagging profits, according to a report from the Associated Press today (October 28, 2003).
Sony said 7,000 of the job cuts will be in Japan, according to the report. Sony employs about 154,500 people worldwide.
The cost cuts, to save the company $2.8 billion a year, calls for Sony to trim production, distribution and service facilities by about 30 percent and stop Japanese production of cathode ray tubes for TVs by the end of this year, according to the report.
The company plans to "integrate overlapping administrative and corporate jobs to increase efficiency, such as by relocating U.S. electronics and marketing operations divided between the West and East Coasts mainly to the West Coast," according to the report. "In Europe, it will bring together consumer electronics marketing groups to a new location in Britain," the report said.
"The plan includes bringing together engineers in the company's home and mobile electronics sectors, such as cell phones, TVs and video-game consoles, to beef up development of computer chips and devices, Sony said," it added.
The company said the turnaround plan would boost efficiency and better integrate its entertainment, video-game and consumer electronics businesses, according to the report.
Sony calls the plan as the "Big Bang" catalyst for new business. Sony's profits tumbled 25 percent in the July-September quarter to $304 million compared to a year ago. Sales edged up 0.4 percent to $17 billion -- the first sales increase in three quarters.
Separately, Sony will set up a $2 billion joint venture with Samsung Electronics Co. of South Korea to develop liquid crystal display panels.