Sony Plans Major Job Cuts

It will eliminate 10,000 positions in an effort to revive its electronics unit.
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Sony

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will cut 10,000 jobs worldwide and streamline various business units in an effort to reverse losses in its electronics unit and revive a flagging stock.

The initiatives, announced Thursday by new CEO Howard Stringer, will result in a restructuring charge of nearly $2 billion, causing a loss for the current fiscal year. Sony hopes the restructuring will save it $1.8 billion a year when it is completed in 2008.

Four thousand of the job cuts will occur in Japan, with the rest overseas. The company employs about 151,000 people worldwide. Sony also plans to close a number of plants and explore asset sales that could total $1.2 billion over the next four years.

"In particular, the company is concentrating on the revitalization of its electronics business through further structural reforms and promotion of a well-defined growth strategy," Sony said in a statement. The company hopes to boost annual sales to about $72 billion and operating margin to 5% by the end of fiscal 2007.

Sony, which has been playing an uncharacteristic game of catch-up in a number of digital entertainment categories, said it will focus resources in the electronics group around high-definition and mobile products, as well as the chips and components that power them.

"In addition to our strengthened electronics business, we will leverage all our resources including motion pictures, music, games and our brand recognition to deliver more appealing products and services as the world's leading electronics and entertainment company," Sony said.

Sony shares closed at $35.97 Wednesday. They traded above $100 as recently as October 2000.