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Tuesday, March 9, 1999 Published at 07:24 GMT


Business: The Company File

Sony cuts back to move forward

Nobuyuki Idei, right: Changes needed to cut costs and boost profits

Japanese electronics giant Sony Corporation has announced it will cut 17,000 jobs as part of a major restructuring program.


The BBC's David Ivens: "A restructuring and repositioning in the market"
The four-year overhaul will see the company's workforce reduced by 10% and the closure of 15 of its 70 worldwide manufacturing plants.

The company is refocusing its business away from traditional consumer products like TVs and stereos towards digital products like computers, video games, playstations and cameras.

Playstation taken over

Under the reshuffle, Sony will absorb the subsidiary that makes its successful PlayStation game player, Sony Computer Entertainment, in which it holds a 49.8% stake.

Sony President Nobuyuki Idei said: " We will take steps in Europe, Asia, the US and Japan. We have to evaluate what sort of businesses will create the most value in the long-term. We have too much capacity."


[ image: Sony's Playstation subsidiary is being absorbed]
Sony's Playstation subsidiary is being absorbed
The changes were also needed to cut costs and boost profits but at the same time the company would invest in research and development, he said.

"Over the next three years Sony will invest aggressively in research and development, capital equipment and facilities so that our electronics business, which is our core business, can evolve to best meet the needs of a 'network-centric' world," Mr Idei said.

One home system

On this score, the company has advanced its vision of converging technologies where one digital home electronic system can be used for entertainment, information and financial services.


BBC Tokyo Correspondent Juliette Hindel: Sony is restructuring in response to the Japanese recession
Other subsidiaries Sony chemicals and Sony Precision Technology would also be taken over.

The company's share price rose more than 7% on the news.

Sony's major competitors Hitachi, NEC and Toshiba have all announced job-cut and restructuring programs as the Japanese economy continues in protracted recession while the wider Asian crisis has also hit sales.



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