10 Dec 2008

Sony to cut 16,000 jobs as recession bites

3:04 pm on 10 December 2008

Japan's Sony Corp is to cut 16,000 jobs, curb investment and pull out of businesses to save $US1.1 billion a year as the financial crisis ravages demand for its electronics products.

The job cuts are the biggest announced by an Asian company so far in the crisis.

Sony said it would cut the jobs 8,000 full time workers and an equal number or more of temporary or contract staff, from its workforce of 185,800.

The announcement underscores the challenges facing Sony, which has fallen behind Apple Inc's iPod in portable music and is losing money on flat TVs.

Sony, along with other Japanese exporters, has also been hit hard by a surging yen against the dollar and euro, which cuts into the value of its profits and makes its products less competitive in overseas markets.

Sony said it would raise prices on some electronics products in Europe in response to the weak euro.

South Korean competitors Samsung and LG Electronics have found some relief in the weaker won.

The Sony restructuring is a setback for chief executive Howard Stringer, who had implemented a major make-over after taking the helm in 2005, and until recently seemed to have put the company on a recovery track.