Swathes of cuts are on their way for Sony Corp, shuttering five or six manufacturing plants and axing 16,000 workers.
There has been great internal resistance against cutting domestic Japanese jobs, reported the Financial Times. Analysts warn the electronics giant may need to do a lot more.
”Sony’s not in a position to halt all domestic production but it has to do something that drastic,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
”If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive.”
The majority of revenue for Sony is in fact earned overseas, by about three quarters, making homeland snips in Japan all the more appealing to the Sony accountants. It’s hard to speculate how this will hit the PlayStation division.
There have been significant hurdles for the Sony higher ups as executives openly resist shifting from hardware to more software orientated ventures and reducing the domestic workforce. It’s expected that Sony will post an annual operating loss of $1.1 billion, the first loss in about 14 years.
The strong Yen makes exports from Japan difficult as they’re less price competitive and saps the worth of their overseas incomes when converted.
Source: Reuters
