Sony slashing 16,000 jobs

[Kayos]

Sony slashing 16,000 jobs

[UPDATE] PlayStation maker cutting 8,000 full-time positions--4 percent of its salaried workforce--and at least 8,000 temporary positions; Pennsylvania TV plant reportedly being shuttered.

Days after Microsoft declared the Xbox 360 outsold the PlayStation 3 three-to-one during "Black Friday" sales in the United States, Sony has announced cutbacks. The Tokyo-based electronics giant will slash 8,000 jobs and close several of its manufacturing facilities in a bid to save $1.1 billion (£745 million) by the end of next financial year. The job losses will come out of core Sony electronics divisions, though no official breakdown has been revealed.

Sony Computer Entertainment Europe did not comment on whether the cutbacks would affect the price of the PlayStation 3, which remains the most expensive--and technologically advanced--console on the market. When queried by GameSpot, a SCEE rep said only, "We will always carefully review and make structural changes, if necessary, in order to further expand and strengthen the PlayStation business around the world."

[UPDATE] The Associated Press is now reporting that Sony will eliminate at least 8,000 "temporary positions" by 2010, bringing the total cuts to 16,000. The news service also quoted Pennsylvania governor Ed Rendell as saying that one of the facilities slated for closure is in his state in the Northeastern US. According to local publication the Triangle Business Journal, the Westmoreland County facility, which manufactured flat-screen televisions, employed 560 people.

The full Article is here.

Sony's getting hit hard by the economy. I believe a lot of it's problems stems from the PS3's botched launch and first year. They lost billions, more than they made with the PS2 in it's entire life, all in one year.

They've made some really bad decisions. I hope they can recover without too much overall damage.

 

[Zangetsu]

well thats what you get for asking $600 per console
they should have done it like microsoft

 

[Spartan Erik]

After all their screw ups, Sony deserves it. It's the workers that don't.

 

[cursedpsp]

After all their screw ups, Sony deserves it. It's the workers that don't.

Its not sony's fault - its the economy.

After 100 years woolworths is going bust within this week if they dont find a buyer - it would then make 18 million people upset and 30,000 jobs gone

People dont actually understand that 5 major airlines, 30 retailers and over 100 companies have withdrawn this year, and this is just the United Kingdom.
For people who blame the companies fault then please get a life and read some news for once.

And besides Sony has been renown to have high prices. You people in America should consider yourselves fortunate for having rediculously cheap prices.
PS3's in the US (from Amazon) are $399.
PS3's in the UK (from Amazon) are £283.79 - well over $500 equiv.

 

[Kayos]

Its not sony's fault - its the economy.

For people who blame the companies fault then please get a life and read some news for once.

It's a combination of bad decisions and the economy. Have you even read the article? They are restructuring roles in the company due to the decisions that were made that lead them to this point.

And besides Sony has been renown to have high prices. You people in America should consider yourselves fortunate for having rediculously cheap prices.
PS3's in the US (from Amazon) are $399.
PS3's in the UK (from Amazon) are £283.79 - well over $500 equiv.

Sony's top SKU in America is $499, not $399. Plus the UK actually gets better bundles than in the US. This is mainly due to David Reeves, Sony's European branch president who is amazing, unlike Jack Tretton, his US counterpart, who just doesn't understand what gamers want.

 

[Macaws]

I thought it was 8,000...
That is not nice. (DUH)
This will probbably slow down future playstation production...

 

[Livewire]

This will probbably slow down future playstation production...

Well they don't appear to be selling particularly well anyways; I'm possibly misinformed here but with how many were sitting on the shelves for its launch year christmas, I'm betting they can deal with some slowdown in production just to get the ones gathering dust out the door again.


That being said, poor business decisions when the economy is stable always leads to a lack of reserves if the economy drops - you tapped the reserves to fix the bad business decisions, which left nothing to use when it all turns sour and lumpy.

 

[Kayos]

You've got to keep in mind that they've been selling the PS3 at a huge loss in the first place. Even if they managed to start selling out everywhere it would make there losses even greater.

The way the other consoles make money is from software sales. Nintendo does profit off of every Wii sold but it's nothing in comparison to what they make with there games.

Anyway, the only way Sony can actually bank in on the PS3 is with games. Sure the popular ones are selling 2-4 million but the rest are just getting by, barely paying off the publishers. Those publishers are mostly reliant on the PC (Due to no royalty fees) and Xbox 360 versions. Wii versions are another issue all together.

I really hope things change for Sony and they really can't afford another price drop at this point. Most likely they are manufacturing new, smaller, cheaper innards to combat it's high price point and that will help them some.

It also boggles my mind that they are having so much financial issues when everyone is going out and buying HDTVs. Surely Sony is one of the best manufacturers of them so they should be selling like hotcakes. I guess by them closing down a manufacturing plant here in PA kind of says otherwise.

Also don't forget about there whole movie branch which should be making enough money to keep jobs pretty secured throughout the entire company.

The whole situation just boggles my mind.

 

[mac173]

But you are assuming that good profit from one division would be used to support another division. This usually does not happen. If TV sales are down, they will shut down and lay people off, even if the corporation as a whole is making money. Shunting profits to a losing division is a quick way to go bankrupt.

 

[burner35]

I don't really care for Sony, good, get rid of 16,000 people.

Fall apart just like your consoles lol

 

[skai123]

I think it's the cellphone and tv division that were losing sales...

 

[infurTH]

the people don't deserve it.

 

[filmfreak]

It's because I stopped buying their products

But seriously, 16.000 jobs is a lot.

 

[Kayos]

Here's an update on the situation:

The layoffs Sony recently announced as an initiative to save more than a billion dollars in these trying financial times will not affect the company's gaming division, according to Sony's European president David Reeves.

In a recent interview with Dutch television station RTL where he was asked about Sony's planned lay-offs of 8,000 employees, Reeves said that Sony is "not scaling back" the game development side of its business.

"Sony lives and dies on the innovative projects they bring out," Reeves said. "In our division, we're still continuing to develop the products which we put in our mid-range plan six months ago. As long as we plan prudently, I think we will be fine."

Article here


That's a good thing for us gamers.

 

[galaxyAbstractor]

lol I belive most large companies is affected.

Here in Sweden Volvo will fire 150 000 people in the coming months, but it isn't sure if Volvo would exist more than 2 - 3 months.

The only Swedish gaming related company is DICE AB(Digital Illusions Creative Entertaintment AB), and it seems like they doing good with Mirrors Edge and other games

 

[Kayos]

lol I belive most large companies is affected.

Here in Sweden Volvo will fire 150 000 people in the coming months, but it isn't sure if Volvo would exist more than 2 - 3 months.

The only Swedish gaming related company is DICE AB(Digital Illusions Creative Entertaintment AB), and it seems like they doing good with Mirrors Edge and other games

Mirror's Edge was a direct cause for layoffs at EA. It under performed. That said DICE most likely won't be getting any lay offs either. There Battlefield franchise has them secured pretty well.

 

[galaxyAbstractor]

Mirror's Edge was a direct cause for layoffs at EA. It under performed. That said DICE most likely won't be getting any lay offs either. There Battlefield franchise has them secured pretty well.

Really? Because the news in Sweden said mirrors edge did pretty well

 

[Kayos]

Really? Because the news in Sweden said mirrors edge did pretty well

The two new creative ventures, Mirror's Edge and Dead Space, have both failed miserably. This is in spite of lengthy and extensive marketing for each game, including a series of graphic novel-style backstory trailers for Dead Space released over several months.

http://www.gamasutra.com/view/feature/3882/npd_behind_the_numbers_november_.php?page=6

 

[skai123]

i just think EA released DS and ME at the wrong time, with so many other good games that came out this fall/winter...

 

[Max1337]

Ouch...
Sucks to see Sony loosing money like that, they should fix whatever they did wrong, and get their revenue back up.