Sony cuts 8000 jobs and contracts investment plans

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Sony cuts 8000 jobs and contracts investment plans

Tokyo (Japan) – Sony announced on Tuesday that it would be cutting its workforce by 8000 jobs and additionally pull back its planned investment in reaction to an intensely slowing economy.

Sony previously announced steps to cut costs and is now blaming the fast deterioration of the global economic outlook, and the strong Japanese currency for the job cuts. “These initiatives are in response to the sudden and rapid changes in the global economic environment,” Sony said. Sony aims save more than 100 billion yen, or $1.1 billion, per year.

Besides cutting about 5% of its workforce, Sony will also shut down six of its 57 plants. Their current plans to expand a Slovakia location has also been delayed. At this point, it has yet to be disclosed which plants will be closed. Additionally, Sony said it will be reducing its investment in the electronics business by about 30% during the 2010 fiscal year.
Sony has suffered recently due to a weakened demand from consumers. The struggle is further fueled by the yen’s fight against the dollar and the euro. Japanese goods are becoming more expensive for consumers that reside in the United States and Europe.

Sony’s recent earnings, like many others, have plummeted due to a slowing export, thus forcing the company to slash its annual profit forecast for the fiscal year through March 2009 by 58%.