Sony announces 8,000 jobs to be axed

Japan-based electronics giant Sony has announced plans to axe 8,000 jobs worldwide and close a number of its factories, in an effort to save $1.1 billion per year.

In addition, Sony will be reviewing its investment commitments and working out ways to improve its operating efficiency.

The company said the job cuts – the biggest by an Asian firm since the credit crisis began – would be made in its core electronics division, and would be completed by 2010.

Eight thousand jobs is equivalent to 5% of the division.

A breakdown of the job losses in terms of geographical regions was not given.

Sony said the cost cutting is necessary as production will be reduced during the economic downturn.

Investment in electric operations will be cut by 30%, whilst around 10% of its 57 production facilities will be closed down.

Prices will also be adjusted to reflect the higher value of the Japanese yen – which has risen more than 10% against the US dollar since the summer.

A high value yen hits the bottom line of Japanese exporters and makes their products less competitive.

The cost cutting measures are not expected to impact Sony’s other major divisions, which include the Sony Playstation games business and the Sony Pictures movie unit.

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