Sony to shed 16,000 jobs, increase prices in bid to bolster profitability (Updated)
By Thomas Ricker 
posted December 9th 2008 2:04AM
posted December 9th 2008 2:04AM
"Going forward, Sony intends to adjust product pricing to mitigate the impact of the appreciation of the yen."Sony is also delaying or at least curtailing some of its investments while planning to "downsize or withdraw from unprofitable or non-core businesses." All these moves are meant to cut operational costs by some $1.1 billion in operational efficiencies before the fiscal year closes on 31 March 2010.
Update: Yup, we were right. According to Reuters, Sony will "raise prices on some electronics products in Europe from the beginning of 2009." Also, Bloomberg reports that 8,000 contract workers from the electronics division will also be shed for a total of 16,000 personnel added to the world's unemployment roster.
Winning combination?!? I think you mean the opposite right?
The PS3 was a massive failure, hence these job cuts and price increases. Not only is it just the PS3 though, most of Sony's products don't last long or don't work out of the box, new....
@ Technex
PS3 was a massive failure? As in past tense? How so? It's doing fine now. Just fine. I would'nt call it a massive failure at all.
Please get your facts right.
ps - the above poster you replied to was being sarcastic.......
I would hardly call the PS3 king of the console war with last place.
http://www.msnbc.msn.com/id/16115967/
http://nexgenwars.com/
Last place by nearly 12 million. Get your facts straight.
If you have watched the interview with Sony CEO, you would know why is the 8000 cut. I will try to quote him :)
"Sony is so big that we are developing the same products in two different divisions and nobody notices" i guess they really have a lot of people worth firing.
Sony is already overpriced, increasing it's price right now, right in the beginning of the world crysis, it just would decrease the sales significantly more
EDIT: Sony is already way overpriced, increasing it's price would only decrease it's sales. Especially since we are starting to enter the World Crysis.
"Crysis" is not a word.
Overpriced? Really? I wouldn't say that anymore.. Two years ago, sure.. but not, their Vaio laptops are actually priced really good, at least for what they deliver.. And btw, we are not starting to enter the world "Crysis", but we have kinda already been in it for some time..
BTW, you game too much? Crysis =/= crisis :p
The truth is that Sony's future will be full of DOOM and gloom if they raise prices in this financial CRYSIS. RESISTANCE from consumers will be high as economies around the world are feeling the QUAKE of a crumbling credit infrastructure. The present economic situation is a FARCRY from the prosperous but UNREAL 'dot-com' run-up of the '90s.
boo hyphen hoo.
hey sony, maybe you wouldn't be in this mess if you concentrated more on the hardware and less on stiffing the customer.
they've a long track record of this, and also of letting lawyers fvck up the engineering.
Mini disk, UMD on PSP (WTF were they thinking?), Memory Stick Duo/mini/etc, root kits on audio CDs, ARCOSS protection on DVDs - I could go on.
Oks, I'll so get lowest ranked for this, but, the truth is: life is a bitch!
Get used to it. As much as we'd all wish there be no wars, everybody was rich, smart and happy, the reality is quite the opposite, there are wars, there are stupid people as there are sick people and unhappy people.
Further more, if we broaden our view on nature, it's f*cked as hell from all of our behavior.
Anyways, Sony sucks ass with those price increses. If they want to reflect the "udden and rapid changes in the global economic environment", why the hell are they incresing prices?
BS!
Well, looks like I won't be buying any sony products any time soon...
Granted, I can't afford them as it is, but I'm sticking to my guns, here.
They could always start making good products. What is stopping them? I am here, know how to make them.. yet still they have not employed me. Oh well, keep shedding jobs until you realise that power of BobTurbo.
People are getting poorer so sony raises prices so they sell less and people are getting even more poor, it' nice to see sony has a firm grasp of the current crisis and how the great depression back when got out of control, and are helping it along using that model.
Little hint to sony and other companies: everybody is in the crisis not just you and you can't escape it by putting the load on the customers, you have to suck it up and accept there's slightly less profit for a while.
Not that I have all the answers though.
Whay hey Sony!! congrats on confirming something for Europe so quickly for once! now if you could only confirm actual products for europe as quickly then we might pay the premium.
Quote: 'Anyways, Sony sucks ass with those price increses. If they want to reflect the "sudden and rapid changes in the global economic environment", why the hell are they incresing prices?'
You have kinda answered your question i.e. quote: 'life is a bitch!'
Chysler tried this approach with theior cars, it didn't work too well for them. In a time where NO ONE is spending money, Sony will go from an already more expensive brand than everyone else to an even MORE expensive brand? I think they'll end up pricing themselves out of a lot of purchases opportunities. If they raise the PS3 prices when the Wii is half the price and Xbox being ripped of any value to compete, and Blu-Ray disks $39 at most stores, I don't see this working out well for Sony.
Raise the PS3 one single cent and watch the death spiral begin.
FCUK Sony and anyone who looks like Sony.
As a person who looks a bit like Sony, I can tell you that your comments are hurtful.
FUCK Sony. I stopped buying their crap on principle after they started shipping CDs with rootkits on them. I hope they go out of business.
Same, same, not just because of the bundled rootkits though...
FUCK Sony.
Prices have to go up because of the Yen vs the Dollar. It's not very hard people.
Consumer electronics have very thin profit margins. Plus vendors like Best Buy and Walmart kill company margins as well. Having Circuit City go under just lets Best Buy and Walmart bully vendors more.
Walmart requires 60-70% margin on amost everything sold in the store. TV sets are sold at around 38% margin. What that means is if a product is $10 on the shelf Walmart paid $3 for it. So to make any profit as a vendor you need to be able to make the product for less than $3. Lets just say it cost you $2 to make and ship the product. Your company makes $1 or 33% profit margin per unit sold. Not very fair that Walmart gets to make $7 and you get to make $1, but thats the retail world we live in today. Say you are an american branch of a Japanese company. You don't get to just sell product in the US from Japan. You have to buy it from Japan and resell it here. You used to be able to buy 120 Yen worth of product for every dollar you had. Now you can only buy 96 yen worth of product for every dollar.
You just lost 20% profit margin in currency conversion. When you were only making 33% profit selling a product to begin with. If you keep the price the same you will be down to 13% profit. Once you pay for company expenses you may not be able to pull a profit at all. You have no choice but to increse your wholsale cost. The problem is that your big accounts might not accept your higher price. You are forced into a jam and hope that demand for your product forces the account to accpet the higher price.
Or Walmart could just reduce thier insane profit margin and let vendors make money so they can pay people good wages and stay in business. Nah that won't happen, they're Walmart.
Yet again we have Sir Howard Stringer to blame. Aibo, Clie, and essentially all other creative R&D got canned under his reign in the name of "profitability".
Now the Sony we all knew and loved, the amazing bells and whistles with massive price tags brand is gone forever. LG and Samsung shall take over with almost cool but still looks like a hyundai electronics.
Thanks Stringer.