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Sony to cut 8,000 jobs amid global downturn ,16,000 jobs + 1.1 $ Billion, & Adobe to eliminate 600 jobs worldwide (Macworld.com)
Sony to cut 8,000 jobs amid global downturn
By YURI KAGEYAMA, AP Business Writer
TOKYO – Sony is slashing 8,000 jobs, or 4 percent of its global work force, aiming to cut costs by $1.1 billion a year as an economic downturn and a stronger yen batter profits at the Japanese electronics maker.
Sony Corp., which has 185,000 employees worldwide, said Tuesday it will complete the job cuts — all in the electronics sector — by the end of March 2010.
The company will close several plants, including one in Dax, France, cut investment in electronics and outsource some work. The moves will deliver more than 100 billion yen ($1.1 billion) in savings a year by March 2010, the company said.
The global financial crisis is hitting the U.S., European, Japanese and emerging nations' economies, said Senior Vice President Naofumi Hara.
"Now we are all facing a recession together," he said. "It is impossible to predict how much longer the situation will last."
Sony's announcement comes amid similar news from other Japanese manufacturers, which face plunging demand at home and abroad, as well as falling gadget prices and currency fluctuations. But Sony's job cuts are Japan's biggest since the U.S. credit crunch hit over the summer.
Kazuharu Miura, electronics analyst at Daiwa Institute of Research in Tokyo, warned that the measures may not be enough to offset the damage from sliding profits.
"The entire high-tech market is being seriously hurt," Miura said. "Japanese companies are all in trouble because of this unexpected worldwide slowdown."
Sony — maker of the Walkman portable player and PlayStation 3 game console — is particularly vulnerable to the strong yen since about 80 percent of its sales come from overseas. The dollar has dropped to about 93 yen from 117 yen last year, eroding with it Sony's foreign income.
Hara said the ways the job cuts will be carried out will vary by country, but he did not provide a breakdown. Sony's electronics business employs about 160,000 workers.
The company also has movie, video game and financial businesses.
Sony has adjusted production and lowered inventories, but tough times demand more drastic efforts, it said in a statement.
The cost-cutting plan includes postponing an investment to boost production of liquid crystal display TVs in Slovakia because of a plunge in European demand for flat-panel TVs.
"These initiatives are in response to the sudden and rapid changes in the global economic environment," Sony said.
Sony will end production at some plants, including one in France that makes tape and other recording media and will continue moving electronics production to lower-cost countries. Manufacturing sites will be reduced by about 10 percent, or five or six plants, from 57 today.
Sony will also trim spending in semiconductors, and will outsource a portion of the production it had planned for image sensors for mobile phones.
The cost of the job cuts and plant shutdowns will be disclosed next year when the company updates its forecast for the fiscal year, the company said.
Hara said Sony will reduce investment in electronics by 30 percent for the following fiscal year ending March 2010. But he said specific numbers and details had not been decided.
Apart from the 8,000 electronics job losses, Hara said Sony would cut at least 8,000 temporary jobs in the same sector by the end of March 2010. He said temporary workers are not counted in the tally of Sony's global work force.
Sony recently slashed its full-year earnings projection, citing weaker consumer demand and a stronger yen. For the fiscal year through March 2009, it is expecting a 150 billion yen ($1.5 billion) profit, down 59 percent from the previous year.
Hara said it was unclear whether a further revision will be needed for the current fiscal year.
Sony's July-September profit plunged 72 percent from a year earlier to 20.8 billion ($224 million).
The announcement came shortly after trading ended in Tokyo, where Sony shares rose 3.9 percent to 1,896 yen ($20).
Sony to cut 16,000 jobs, slash $1.1 billion in costs
TOKYO (Reuters) – Japan's Sony Corp said it will cut 16,000 jobs, curb investment and pull out of businesses to save $1.1 billion a year as the financial crisis ravages demand for its electronics products.
The job cuts are the biggest announced by an Asian firm so far in the crisis and underscore the challenges facing Sony, which has fallen behind Apple Inc's iPod in portable music and is losing money on flat TVs.
Sony said it would cut 8,000 regular workers, or roughly 4 percent of its workforce of 185,800, and an equal number or more temporary and contract staff.
But analysts warned the measures may not be bold enough to streamline a sprawling empire that ranges from semiconductors to movies and insurance. The cuts are also risky because they mean Sony will be investing less in future growth.
"The number sounds big, but this staff reduction won't be enough. Sony doesn't have any core businesses that generate stable profits," said Katsuhiko Mori, a fund manager at Daiwa SB Investments.
"After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company."
Sony is not the only one suffering. Japanese rival Panasonic
lowered its earnings forecasts last month while South Korea's Samsung Electronics Co said on Monday it would cut capital investment and warned of tough times.
Shares in Sony, which have fallen nearly 70 percent this year, rose 3 percent to 15.8 euros in Frankfurt after the announcement.
Sony flagged the need for restructuring in October when it more than halved its annual profit forecast, blaming slowing demand for its Bravia liquid crystal display TVs and Cyber-shot digital cameras and a firmer yen.
The restructuring is a setback for Chief Executive Howard Stringer, who had implemented a major restructuring after taking the helm in 2005 and until recently seemed to have put the company on a recovery track.
It also underlines the grim outlook for Sony and its rivals during the year-end shopping season and into next year as the financial crisis grows into a recession that has already engulfed the United States, parts of Europe and Japan..
"The outlook for the global economy suggests that things would become tougher for Sony next year, and it cannot expect a recovery without these restructuring measures," said Fujio Ando, senior managing director at Chibagin Asset Management.
CURRENCY IMPACT
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.
Both companies have adjusted production to cope with falling orders and say they do not plan to cut staff, but analysts are not so sure.
"Japanese electronics makers suffer more than their rivals in South Korea because of the stronger yen," said Lee Min-hee, an analyst at Dongbu Securities in Seoul. "But going forward Korean manufacturers could consider more drastic measures."
Sony said it would delay boosting output for LCD TVs in Slovakia and outsource production of image sensor chips, as it aims to cut electronics investment by 30 percent in the next business year compared with a prior plan.
It also unveiled plans to reduce its network of 57 manufacturing sites by 5 or 6 through outsourcing and by shifting and consolidating factories to low-cost areas. Earlier this week it announced the closure of a videotape plant in France.
Sony said it would detail the effect of the restructuring on earnings at its third-quarter results in January. It has already warned that it may need to revise down its profit forecasts further due to yen strength.
Other technology and auto manufacturers could follow suit in coming weeks with their own restructuring plans, raising the prospect for industry realignment.
"Sony's restructuring might be followed by other Japanese manufacturers. With the stronger yen, a lot more companies will probably need to do similar reductions. There will be more mergers, sales of units and restructuring in Japan," Daiwa SB's Mori said.
(Additional reporting by Junko Fujita, Yuko Inoue and Aiko Hayashi in Tokyo, So Eui Rhee in Seoul; Editing by Rodney Joyce and David Cowell)
Adobe to eliminate 600 jobs worldwide (Macworld.com)
Adobe on Wednesday announced plans to cut approximately 600 full-time jobs in response to less-than-anticipated earnings for its fiscal fourth quarter of 2008.
In its preliminary financial results (PDF link), Adobe said demand for its Creative Suite 4 products was weaker than expected, and suggested the economy was a factor in the company's revenue shortfall. Adobe's CS4 products—featuring an overhaul of most of its tools for creative professionals—began shipping in October.
“The global economic crisis significantly impacted our revenue during the fourth quarter,” said Shantanu Narayen, Adobe's president and CEO in the company's press release. “We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities.”
Adobe had targetted between $925 million and $955 million for revenue in the quarter ending on November 28, 2008, but said that preliminary financial information indicates a range of $912 million to $915 million. Analysts had estimated revenue of $930 million.
The company has implemented a restructuring program, which includes the elimination of about 600 jobs worldwide.
Adobe will announce final earnings for the quarter on December 16, 2008.
By YURI KAGEYAMA, AP Business Writer
TOKYO – Sony is slashing 8,000 jobs, or 4 percent of its global work force, aiming to cut costs by $1.1 billion a year as an economic downturn and a stronger yen batter profits at the Japanese electronics maker.
Sony Corp., which has 185,000 employees worldwide, said Tuesday it will complete the job cuts — all in the electronics sector — by the end of March 2010.
The company will close several plants, including one in Dax, France, cut investment in electronics and outsource some work. The moves will deliver more than 100 billion yen ($1.1 billion) in savings a year by March 2010, the company said.
The global financial crisis is hitting the U.S., European, Japanese and emerging nations' economies, said Senior Vice President Naofumi Hara.
"Now we are all facing a recession together," he said. "It is impossible to predict how much longer the situation will last."
Sony's announcement comes amid similar news from other Japanese manufacturers, which face plunging demand at home and abroad, as well as falling gadget prices and currency fluctuations. But Sony's job cuts are Japan's biggest since the U.S. credit crunch hit over the summer.
Kazuharu Miura, electronics analyst at Daiwa Institute of Research in Tokyo, warned that the measures may not be enough to offset the damage from sliding profits.
"The entire high-tech market is being seriously hurt," Miura said. "Japanese companies are all in trouble because of this unexpected worldwide slowdown."
Sony — maker of the Walkman portable player and PlayStation 3 game console — is particularly vulnerable to the strong yen since about 80 percent of its sales come from overseas. The dollar has dropped to about 93 yen from 117 yen last year, eroding with it Sony's foreign income.
Hara said the ways the job cuts will be carried out will vary by country, but he did not provide a breakdown. Sony's electronics business employs about 160,000 workers.
The company also has movie, video game and financial businesses.
Sony has adjusted production and lowered inventories, but tough times demand more drastic efforts, it said in a statement.
The cost-cutting plan includes postponing an investment to boost production of liquid crystal display TVs in Slovakia because of a plunge in European demand for flat-panel TVs.
"These initiatives are in response to the sudden and rapid changes in the global economic environment," Sony said.
Sony will end production at some plants, including one in France that makes tape and other recording media and will continue moving electronics production to lower-cost countries. Manufacturing sites will be reduced by about 10 percent, or five or six plants, from 57 today.
Sony will also trim spending in semiconductors, and will outsource a portion of the production it had planned for image sensors for mobile phones.
The cost of the job cuts and plant shutdowns will be disclosed next year when the company updates its forecast for the fiscal year, the company said.
Hara said Sony will reduce investment in electronics by 30 percent for the following fiscal year ending March 2010. But he said specific numbers and details had not been decided.
Apart from the 8,000 electronics job losses, Hara said Sony would cut at least 8,000 temporary jobs in the same sector by the end of March 2010. He said temporary workers are not counted in the tally of Sony's global work force.
Sony recently slashed its full-year earnings projection, citing weaker consumer demand and a stronger yen. For the fiscal year through March 2009, it is expecting a 150 billion yen ($1.5 billion) profit, down 59 percent from the previous year.
Hara said it was unclear whether a further revision will be needed for the current fiscal year.
Sony's July-September profit plunged 72 percent from a year earlier to 20.8 billion ($224 million).
The announcement came shortly after trading ended in Tokyo, where Sony shares rose 3.9 percent to 1,896 yen ($20).
Sony to cut 16,000 jobs, slash $1.1 billion in costs
TOKYO (Reuters) – Japan's Sony Corp said it will cut 16,000 jobs, curb investment and pull out of businesses to save $1.1 billion a year as the financial crisis ravages demand for its electronics products.
The job cuts are the biggest announced by an Asian firm so far in the crisis and underscore the challenges facing Sony, which has fallen behind Apple Inc's iPod in portable music and is losing money on flat TVs.
Sony said it would cut 8,000 regular workers, or roughly 4 percent of its workforce of 185,800, and an equal number or more temporary and contract staff.
But analysts warned the measures may not be bold enough to streamline a sprawling empire that ranges from semiconductors to movies and insurance. The cuts are also risky because they mean Sony will be investing less in future growth.
"The number sounds big, but this staff reduction won't be enough. Sony doesn't have any core businesses that generate stable profits," said Katsuhiko Mori, a fund manager at Daiwa SB Investments.
"After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company."
Sony is not the only one suffering. Japanese rival Panasonic
lowered its earnings forecasts last month while South Korea's Samsung Electronics Co said on Monday it would cut capital investment and warned of tough times.
Shares in Sony, which have fallen nearly 70 percent this year, rose 3 percent to 15.8 euros in Frankfurt after the announcement.
Sony flagged the need for restructuring in October when it more than halved its annual profit forecast, blaming slowing demand for its Bravia liquid crystal display TVs and Cyber-shot digital cameras and a firmer yen.
The restructuring is a setback for Chief Executive Howard Stringer, who had implemented a major restructuring after taking the helm in 2005 and until recently seemed to have put the company on a recovery track.
It also underlines the grim outlook for Sony and its rivals during the year-end shopping season and into next year as the financial crisis grows into a recession that has already engulfed the United States, parts of Europe and Japan..
"The outlook for the global economy suggests that things would become tougher for Sony next year, and it cannot expect a recovery without these restructuring measures," said Fujio Ando, senior managing director at Chibagin Asset Management.
CURRENCY IMPACT
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.
Both companies have adjusted production to cope with falling orders and say they do not plan to cut staff, but analysts are not so sure.
"Japanese electronics makers suffer more than their rivals in South Korea because of the stronger yen," said Lee Min-hee, an analyst at Dongbu Securities in Seoul. "But going forward Korean manufacturers could consider more drastic measures."
Sony said it would delay boosting output for LCD TVs in Slovakia and outsource production of image sensor chips, as it aims to cut electronics investment by 30 percent in the next business year compared with a prior plan.
It also unveiled plans to reduce its network of 57 manufacturing sites by 5 or 6 through outsourcing and by shifting and consolidating factories to low-cost areas. Earlier this week it announced the closure of a videotape plant in France.
Sony said it would detail the effect of the restructuring on earnings at its third-quarter results in January. It has already warned that it may need to revise down its profit forecasts further due to yen strength.
Other technology and auto manufacturers could follow suit in coming weeks with their own restructuring plans, raising the prospect for industry realignment.
"Sony's restructuring might be followed by other Japanese manufacturers. With the stronger yen, a lot more companies will probably need to do similar reductions. There will be more mergers, sales of units and restructuring in Japan," Daiwa SB's Mori said.
(Additional reporting by Junko Fujita, Yuko Inoue and Aiko Hayashi in Tokyo, So Eui Rhee in Seoul; Editing by Rodney Joyce and David Cowell)
Adobe to eliminate 600 jobs worldwide (Macworld.com)
Adobe on Wednesday announced plans to cut approximately 600 full-time jobs in response to less-than-anticipated earnings for its fiscal fourth quarter of 2008.
In its preliminary financial results (PDF link), Adobe said demand for its Creative Suite 4 products was weaker than expected, and suggested the economy was a factor in the company's revenue shortfall. Adobe's CS4 products—featuring an overhaul of most of its tools for creative professionals—began shipping in October.
“The global economic crisis significantly impacted our revenue during the fourth quarter,” said Shantanu Narayen, Adobe's president and CEO in the company's press release. “We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities.”
Adobe had targetted between $925 million and $955 million for revenue in the quarter ending on November 28, 2008, but said that preliminary financial information indicates a range of $912 million to $915 million. Analysts had estimated revenue of $930 million.
The company has implemented a restructuring program, which includes the elimination of about 600 jobs worldwide.
Adobe will announce final earnings for the quarter on December 16, 2008.
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