Sony in trouble, expected to cut 8000 jobs

[AranhaHunter]

TOKYO, Dec 9 (Reuters) - Japanese electronics maker Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) said it will cut 8,000 jobs, scale back investments and pull out of unprofitable businesses as part of restructuring efforts to shave 100 billion yen ($1.1 billion) in costs.

Sony had said in October that it would close some plants, reduce capital spending and cut jobs to cope with the tough business environment. (Reporting by Nathan Layne)

http://www.reuters.com/article/marke...00309420081209

Damn....will they get rid of Sony Ericsson? Sell their shares of MGM? Get out of gaming?

[ussrelativity]

No way they are getting out of the gaming market.

The PS3 has had numerous cost improvements, although they shouldn't have gotten rid of the card reader and 2 of the USBs.

[Awesome McCool]

No surprise there. Japan is feeling the effects of the recession. A LOT of people are going to lose their jobs in the next few months.

[Maximus]

I am pretty sure they are talking about other stuff.

Gaming is on the verge of being profitable, to drop out now would make zero sense, especially considering the sunk costs.

MGM has always been a questionable investment, no theatrical or home video distribution, no production rights. It doesn't make any sense under the current structure.

[silversnake]

Originally Posted by Maxpower1987

I am pretty sure they are talking about other stuff.

Gaming is on the verge of being profitable, to drop out now would make zero sense, especially considering the sunk costs.

Sony cuts not expected to hit gaming division

Sony’s announcement Tuesday to slash 8,000 jobs worldwide and shut down some plants is “not expected” to hit the company’s video game sector.

The electronic giant’s latest move is aimed at cutting costs by $1.1 billion a year amid a global downturn and stronger yen battering profits.

“Particularly within its electronics business, where Sony has been most affected by the acute downturn in the economic climate, the company has already undertaken certain short-term measures, including adjusting production, lowering inventory levels, and reducing operational expenses. Going forward, Sony intends to adjust product pricing to mitigate the impact of the appreciation of the yen, curtail or delay part of its investment plans, and downsize or withdraw from unprofitable or non-core businesses. Furthermore, Sony plans to realign domestic and overseas manufacturing sites, reallocate its workforce and reduce headcount,” the company said in a statement.

Sony’s PlayStation video games division, along with the Sony Pictures movie business, is reportedly “not expected” to be affected by the cost-cutting drive.

“Through these measures, Sony will aim to establish a corporate structure capable of delivering estimated total annual cost savings of more than 100 billion yen by the end of the fiscal year ending March 31, 2010.”

[alkalinesi]

so does this mean we should go out and buy more sony products? ok ok sorry just looking for an excuse for more toys lol

[xtop]

article i read mentioned raising prices on electronics in europe

[JonD7]

Somehow with my PS3 dying two times in the last 4 months I think i'm doing my job by having them repairing it for $150... for the second time. I love you, you filthy lovely bastards at Sony.

[AikonEnt]

Originally Posted by xtop

article i read mentioned raising prices on electronics in europe

Crap. They're already one of the most expensive in the UK (mainstream anyway). I'm never going to be available to afford a nice big Sony TV

[Xerios]

Originally Posted by xtop

article i read mentioned raising prices on electronics in europe

youre in ohio why do you care lol... that does suck for UK folk looking to live a hi-def life though

Sony is one of our customers (we sell servers to them) this is bad news.. but then again citigroup cut 45,000 jobs so im happy this is less than 1/8 of that problem

[Maximus]

Originally Posted by xtop

article i read mentioned raising prices on electronics in europe

WW price adjustments are coming from all Japan based CE companies.

Yen has risen 25% against USD and 40% against EUR!

It is sad to see so many people getting fired, but in times of recession this is always what happens.

Don't act surprised if we don't see a PS3 price cut until late next year now. If Sony are trying to prove the profitability of their business then the PS3 absolutely needs to post a big money profit.

[xtop]

Originally Posted by Maxpower1987

WW price adjustments are coming from all Japan based CE companies.

Yen has risen 25% against USD and 40% against EUR!

It is sad to see so many people getting fired, but in times of recession this is always what happens.

Don't act surprised if we don't see a PS3 price cut until late next year now. If Sony are trying to prove the profitability of their business then the PS3 absolutely needs to post a big money profit.

it is pretty sad, and ouch.

could they afford to do that? wouldnt that basically let the 360 run away? or wont enough consoles be sold for it to matter. or is 'winning' even a concern for sony?

[BluOgre]

Originally Posted by Maxpower1987

WW price adjustments are coming from all Japan based CE companies.

Yen has risen 25% against USD and 40% against EUR!

It is sad to see so many people getting fired, but in times of recession this is always what happens.

Don't act surprised if we don't see a PS3 price cut until late next year now. If Sony are trying to prove the profitability of their business then the PS3 absolutely needs to post a big money profit.

wow, that will be very sad to see the PS3 at $399 until late next year. If that is the case they are basically saying they would rather have 3rd place and more profit than a huge spike in sales with little profit.

I really can't imagine the PS3 being 3 years old still at a $399 price.....that is just unbelieveable.

[AranhaHunter]

Originally Posted by Maxpower1987

I am pretty sure they are talking about other stuff.

Gaming is on the verge of being profitable, to drop out now would make zero sense, especially considering the sunk costs.

MGM has always been a questionable investment, no theatrical or home video distribution, no production rights. It doesn't make any sense under the current structure.

Thinking about it, I don't know if selling MGM would be wise because
1) It's probably not costing them a lot of money since they only own 20% of the company and
2) They would be lucky to get close to half of what they paid for just 4 years ago IMO.

I think one thing this article does is pretty much squashes the rumors of them buying out Sony Ericsson or MGM. It even squashes the rumor of them buying out more developers like Level 5.

Originally Posted by xtop

it is pretty sad, and ouch.

could they afford to do that? wouldnt that basically let the 360 run away? or wont enough consoles be sold for it to matter. or is 'winning' even a concern for sony?

The main thing now is profitability, Sony might have to settle for 3rd place this generation, but as long as they stay profitable, they will live to fight another day with the PS4 and PSP2. The better question is, can the PS3 sell in 2009 at those price? I'm hoping the economy will get better next year and that the Euro and dollar gain some strength, that way Sony can easily afford a price cut. Hoping, but I doubt it'll happen.

[joeorc]

Originally Posted by xtop

it is pretty sad, and ouch.

could they afford to do that? wouldnt that basically let the 360 run away? or wont enough consoles be sold for it to matter. or is 'winning' even a concern for sony?

It's Always nice to Win ,No Doubt, but Just because Sony may be in 3rd does not mean its a bad thing, 3rd place when there is only 4 companies in the race...

Nintendo
Microsoft
Sony
PC

Even if your 3rd, as long as you make profits, to companies thats what matter's.

with

Sir Howard Stringer

http://www.charlierose.com/view/interview/9298

that's what he does best, get companies back to profits

[xtop]

i'd imagining winning matters to the developers

[Elandyll]

Originally Posted by xtop

it is pretty sad, and ouch.

could they afford to do that? wouldnt that basically let the 360 run away? or wont enough consoles be sold for it to matter. or is 'winning' even a concern for sony?

At this point, and unless a major turnaroud happens thanks to games (but as we saw this end of year, a very good lineup only goes so far vs low prices), the PS3 will probably have to settle for 3rd place.

I would expect MS to anounce large losses on the Xbox business (if Nintendo makes $6 on a Wii as reported, then there is no way MS makes any money at all on the Arcade, and barely anything on the Premium at those prices imo), but unlike Sony they can afford it thanks to the Oogles of cash brought in by Windows and Office.

So the choice is clear: Either fight for 2nd place in the market while losing tons of cash in the process, or settle for third place with a chance at profitability in 2009 and start preparing round 2 with the PS4...
With the market the way it is, and how desperate MS seems to be winning this round vs Sony, by the time Sony would be ready for a price drop in Mid 2009 MS would also prepare for yet another price drop out of spite, making things moot.

Imo, at this point, Sony should concentrate on getting the best possible software, and try to get to a $299 price point by Nov. 2009 on the PS3, but also prepare early to have the PS4 ready by the time MS launches the 360's successor (retro compatibility and pricing under $400 for base model a must).

My 2cp.

[Mr. HiDef]

Originally Posted by xtop

i'd imagining winning matters to the developers

I agree but I think sony would still be able to get away with a 399 price tag for the ps3 because out of the three consoles the ps3 is not only a gaming machine its a blu ray player and a media center so for all that 399 is well worth it compared to other consoles

[joeorc]

Originally Posted by xtop

i'd imagining winning matters to the developers

well that's more inline with the Publisher's, not so much the Developers as it is with the Publisher's.

Developer's have to Hope, in some cases prey they get picked up.."starving artist" does apply some times...

[xtop]

Originally Posted by joeorc

well that's more inline with the Publisher's, not so much the Developers as it is with the Publisher's.

Developer's have to Hope, in some cases prey they get picked up.."starving artist" does apply some times...

you knew what i meant