- Title: JAPAN: SONY TO CUT 20,000 JOBS IN NEXT THREE YEARS.
- Date: 29th October 2003
- Summary: TOKYO, JAPAN (OCTOBER 28, 2003) (REUTERS - ACCESS ALL) 1. SGV/PAN: ONY CHIEF EXECUTIVE NOBUYUKI IDEI ENTERING FOR NEWS CONFERENCE 0.13 2. LV: NEWS CONFERENCE 0.17 3. (SOUNDBITE)(Japanese) IDEI SAYING: "Sony will reach it's 60th anniversary in 2006 and in order to become a true global company we plan to reach an operating margin of 10 percent. Our motto is to add value to our products which are already a powerful consumer brand -- we have decided to call this officially "Transformation 60". With this in mind, we plan to become the company with the most powerful consumer brand." 0.49 4. MCU: REPORTERS TAKING NOTES 0.55 5. (SOUNDBITE)(Japanese) IDEI SAYING: "With regards to our business, we plan to slash annual fixed costs by 330 billion yen (3:04 billion U.S. dollars) by 2006/07 compared to 2002/03. In order to achieve this, we will review our domestic workforce in related business es. By the end of 2006/07 we plan to cut about 20,000 jobs on a group basis. This will result in pushing up our consolidated operating profit margin by four percent. With the existing four percent operating profit margin, we think it will allow the group to reach it's 10 percent operating profit margin" 1.41 6. GV: SONY CHIEFS SEATED 1.45 7. (SOUNDBITE)(Japanese) IDEI SAYING: "Especially in the Chinese market, digital cameras are seeing booming sales, it has seen growth of 59 percent in six months compared to the same period in the previous year. We would like for you to take note of this as we expect similar growth to continue in the latter half of the year and we are confident of the year end" 2.13 TOKYO, JAPAN (RECENT) (REUTERS - ACCESS ALL) 8. CU: SONY LOGO 2.18 9. GV: VAIO LOGO 2.24 10. MV/CU: VARIOUS OF PEOPLE LOOKING AT CAMERAS (5 SHOTS) 2.50 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 13th November 2003 12:00
- Keywords:
- Location: TOKYO, JAPAN
- Country: Japan
- Reuters ID: LVAB2PUK01527SWOOY5T9SG628DD
- Story Text: Sony Corp announces 20,000 job cuts in the next
three years to help overhaul its struggling electronics
business.
Sony Corp officials said on Tuesday (October
28) it would slash its workforce by about 20,000 in the
next three years in a plan aimed at reviving the Japanese
company's struggling electronics business.
"Sony will reach it's 60th anniversary in 2006 and in
order to become a true global company we plan to reach an
operating margin of 10 percent. Our motto is to add value
to our products which are already a powerful consumer brand
-- we have decided to call this officially "Transformation
60". With this in mind, we
plan to become the company with the most powerful consumer
brand," Nobuyuki Idei, Sony chief executive, told
reporters.
"With regards to our business, we plan to slash annual
fixed costs by 330 billion yen (3.04 billion U.S. dollars)
by 2006/07 compared to 2002/03. In order to achieve this,
we will review our domestic workforce in related
businesses. By the end of 2006/07 we plan to cut about
20,000 jobs on a group basis. This will
result in pushing up our consolidated operating profit
margin by four percent. With the existing four percent
operating profit margin, we think it will allow the group
to reach it's 10 percent operating profit margin," he said.
Prior to the announcement, Sony shares closed up 1.05
percent at 3,860 yen compared to a 1.28 percent rise on
Tokyo's electric machinery sub-index. The stock has
plummeted 89 percent from a lifetime high of 33,900 yen in
March 2000.
As part of the restructuring, Sony announced a $2
billion 50-50 joint venture to make flat screens for
televisions with Samsung in a deal that would give Sony a
steady supply of LCD screens for TVs -- a growth area for
its electronics division.
The venture will begin full production in mid-2005 and
be run by an executive from Samsung, the world's
second-largest maker of LCD panels.
Sony's restructuring will also include a cut of about 13
percent in its global workforce of 154,500 excluding those
in the financial segments. Of the 20,000 job cuts, 7,000
will be conducted at home.
It also said it would consider an initial public
offer
ing for the planned financial holding company.
Sony reported a 25 percent drop in profit for the three
months to September 30 as sales of its PlayStation 2 game
console slackened and its film division churned out a
series of box-office duds.
Accentuating Sony's troubles are improving results from
its Asian rivals, such as a 6.6 percent rise in
third-quarter profit at Samsung Electronics and a 93
percent jump in quarterly profit at South Korea's LG
Electronics.
In the latest quarter, Samsung's non-semiconductor
businesses scored an operating profit margin of nearly 11
percent, compared with 3.1 percent for Sony's electronics
division in the three months to September 30.
Idei was careful to add that all was not doom and gloom.
"Especially in the Chinese market, digital cameras are
seeing booming sales, it has seen growth of 59 percent in
six months compared to the same period in the previous
year. We would like
for you to take note of this as we expect similar growth to
continue in the latter half of the year and we are
confident of the year end," he said.
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