Sony May Be Announcing Drastic Closures Next Month

[modeps]

Sony's reeling with bad times, and now there's a rumor that they're poised to announce some pretty drastic closures of factories and divisions as early as next month. Reuters (http://uk.reuters.com/article/technology-media-telco-SP/idUKT36000820090105?feedType=RSS&feedName=technology-media-telco-SP):

Japan's Sony Corp is likely to announce closures of Japanese factories and major divisions early next month, the Times of London said on Monday, but the company denied any such plan existed.

The maker of Bravia flat TVs and PlayStation video game consoles faces halting sales and mounting piles of inventory in the wake of the financial crisis, even as a stronger yen bites into earnings.

Sony, whose empire encompasses semiconductors, movies and insurance, is braced for a series of measures that would abolish some of its domestic operations and transform the electronic giant's business, the Times said, citing company sources. "We do not plan to announce additional restructuring measures at this time," spokesman Atsuo Omagari said, in response to the report. "We don't have any such plan."

As much as I hate what Sony did with the PS3 launch, hopefully this isn't too terrible for them.

[grognard66]

I know that Sony has already announced the shut-down of their flat screen plant near Pittsburgh (as part of that previous 16K announcement). Since Sony uses contract manufacturer's to build the PS3, I suspect most of these additional cuts will be for their other product lines.

That being said, there may be some consolidation within their captive development houses and relationships with second party developers to save costs. This might be why Ted Price of Insomniac has been hinting that they may go multiplatform in the future.

Also, I doubt Sony can afford R&D for another handheld or console system now, so they will probably be forced to abide by that 10-year cycle out of necessity. In effect, Sony will have to sit out the next generation of consoles, since both Microsoft and Nintendo will likely release their next systems by 2011.

[Trazzlo the Magnificant]

Also, I doubt Sony can afford R&D for another handheld or console system now, so they will probably be forced to abide by that 10-year cycle out of necessity. In effect, Sony will have to sit out the next generation of consoles, since both Microsoft and Nintendo will likely release their next systems by 2011.It would be hard to compete against two companies who aren't in financial difficulty. Nintendo looks to be extremely profitable for the next few years. Microsoft has Windows and Office sales to stuff the financial pipes, and even though the recession might lower expectations, they are probably a long, long way from not showing a profit.

For sure, next generation Sony will be the underdog which is a good thing. I think that's when they do their best work.

[teksama]

So does this mean that buying blu-ray's dubious success might have drained the coffers a little too much. Eating hundreds on each PS3 was bad idea. Dumping big stacks of cash into Cell R&D was maybe not the best plan.

Let's see how they turn this around

[vherub]

Nintendo will be even less likely to release a new console in 2011. And I would think MS would be less eager to abandon the 360 as they were the original xbox. This generation will probably end up being the longest so far.

[Trazzlo the Magnificant]

Nintendo will be even less likely to release a new console in 2011. That's true. And we can only hope that Nintendo is able to keep up with demand by then too. :p
And I would think MS would be less eager to abandon the 360 as they were the original xbox. This generation will probably end up being the longest so far.It could end up that way. What might change it is the cost of an incremental upgrade to the 360 spec's. Maybe they upgrade the output scaler chip, the RAM, up the CPU count to 4 or more, and add a larger permanent base memory for downloads.

But that goes for all of the consoles. Makes sense to me that only every other generation should be a fundamental rethink of the entire structure (and dealing with backward compatibility issues).

[Roc Ingersol]

Hopefully the closures aren't too terrible for the people, you mean.

Who gives a fuck about any corporation?

[EvilBob46]

It would be hard to compete against two companies who aren't in financial difficulty.

Well, Microsoft wants to lay off 17% of its work force.
http://www.fudzilla.com/index.php?option=com_content&task=view&id=11142&Itemid=38

[silv]

Almost all companies are tightening the belt right now, even those who are in a good financial position.

[kwolf]

Hopefully, SOE will get shut down and everybody associated with it will be fired.

[Froggy]

Almost all companies are tightening the belt right now, even those who are in a good financial position.

All the news in America is economic recession. I would agree on a local basis, but someone, somewhere is doing well. If the principal of merchantalism holds true, some international company is buying a speedboat with our holiday bonuses. I just figured it was Sony.

[Johan]

Almost all companies are tightening the belt right now, even those who are in a good financial position.

This.

Even healthy companies use economic downturns to chop away at costs, as an excuse to trim the biggest cost for most companies, which is labor. It's unfortunate, but it is reality.

Good luck to those who are left unemployed. It's tough times out there.

[Meatgortex]

Well, Microsoft wants to lay off 17% of its work force.
http://www.fudzilla.com/index.php?option=com_content&task=view&id=11142&Itemid=38

While it's looking like MS may do a big cut they are still projecting a net income (after taxes) of $24.4 billion to $25.5 billion for fiscal 2009 from revenue of around $66.4 billion. As a total company MS has a very long way to fall before they lose money.

In contrast Sony is projecting a net income of $1.6 billion from $97 billion in revenue. They are still making money, so the doom and gloom statements are a bit early. However, they are spending far too much money to make that money, an equation that can turn negative really quickly.

[Vandenh]

Well, Microsoft wants to lay off 17% of its work force.
http://www.fudzilla.com/index.php?option=com_content&task=view&id=11142&Itemid=38

That is still 101% rumor. But of course on the internet it is a fact happily quoted to derail threads.

[drakkarim]

i was going to say how in the hell could a huge corporation like Sony "not have any plans" for this type of a thing, and then the mess the US is in hit me and i realized that not having "a plan" is SOP apparently. not having a fucking clue seems to be a bragging right as well....

[Froggy]

This.

Even healthy companies use economic downturns to chop away at costs, as an excuse to trim the biggest cost for most companies, which is labor. It's unfortunate, but it is reality.


Are you sure you're an english teacher and not The Monopoly Guy as many of us suspect? ;)

[Meusli]

i was going to say how in the hell could a huge corporation like Sony "not have any plans" for this type of a thing, and then the mess the US is in hit me and i realized that not having "a plan" is SOP apparently. not having a fucking clue seems to be a bragging right as well....

It's amazing how all these intelligent(ha!) people talk waffle for years about their mastery over the econemy and get paid huge bucks to do so. Yet are surprised and don't know what to do when it all messes up. Personally I think these people are only able to react to problems and not circumvent them so why do they get paid big bucks?

[Mr.Green]

Hopefully the closures aren't too terrible for the people, you mean.

Who gives a fuck about any corporation?

This sure makes a fucking lot of sense. :rolleyes:

[Trazzlo the Magnificant]

Well, Microsoft wants to lay off 17% of its work force.
http://www.fudzilla.com/index.php?option=com_content&task=view&id=11142&Itemid=38That is listed as a rumour, and is one that MS said they weren't considering. Of course, that could be fluff, but in either case it's not like MS is facing bankruptcy let alone an operating loss. They might not be growing their money tank as fast as before, or they might use the opportunity to lay off poorly performing employees.

But, they haven't yet said they are having financial difficulties.

[ElektroDragon]

My company has rumoured layoffs in the 20% range. Truly frightening if MS is also going to lay off at the same time, because I doubt anyone is going to hire anyone else when they can have ex-MSers in my area. I might be living in a trailer up in the mountains before long.

[Roc Ingersol]

This sure makes a fucking lot of sense. :rolleyes:How is it difficult? The company is not a person.

It's absurd to say "I hope this doesn't hurt Sony".

[Mr.Green]

How is it difficult? The company is not a person.

It's absurd to say "I hope this doesn't hurt Sony".

Then why the hell did you make a distinction between the corporation and the people working there?

Were you debating semantics or was that a comment made against "The Man"?

[lost]

I like Sony. I believe they produce quality products in a market intent on cutting corners. They have been over-inflated for a while now though.

It's time to put a limit of babies. We are over-populated.

Hey! Why not make the third-world a little richer and they can buy Bravias!

[firecut]

As much as I hate what Sony did with the PS3 launch, hopefully this isn't too terrible for them.

For them? This is just a sign of things to come and it won't be isolated to Sony. Things are going to get very, very bad this year and worse after that. Save your $$$.

[ElektroDragon]

For them? This is just a sign of things to come and it won't be isolated to Sony. Things are going to get very, very bad this year and worse after that. Save your $$$.

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