Sony plans 20,000 job cuts in reorganisation

Sony plans 20,000 job cuts in reorganisation

Sony plans to cut 20,000 jobs, about 13 per cent of its worldwide workforce, and push for greater convergence between its electronics, games and entertainment content over the next three years as part of a reorganisation detailed by the company yesterday.

The central goal of the plan is to increase the company's profit margin to at least 10 per cent in fiscal year 2006 (April 2006 to March 2007), chairman and group CEO, Nobuyuki Idei, said. Sony's profit margin is currently about 4 per cent.

The layoffs will be carried out over a three-year period and correspond to about 13 per cent of the company's workforce, which stood at 154,500 at the end of March.

About 7000 jobs will be lost in Japan. In addition, the company plans to reduce by about 30 per cent the number of facilities, such as factories, warehouses, distribution centers and service centers, it runs from the current total of about 200, president and group chief operating officer, Kunitake Ando, said.

During the conference Sony also announced that it had named president and chief executive officer of Sony Computer Entertainment, and the man behind the PlayStation game consoles, Ken Kutaragi, to head a new internal division that would plough research and development money into developing semiconductors for electronics products.

A budget of $US9.2 billion was being put aside to cover investment in the semiconductor sector over the next three years, Sony said.

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