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Sony Layoffs Fail to Sway Critics

Sony's latest round of spending cuts and layoffs for its electronics business didn't get the enthusiastic reception the company might have been expecting. On Dec. 9, Sony announced plans to lay off thousands of employees, delay spending on factories, and streamline its supply chain for semiconductor chips and flat-screen TVs. All told, the company expects to eliminate more than $1 billion in expenses over the next 15 months.

But analysts have attacked the plan for being short on details. "There's nothing in the announcement about the speed at which the company will carry out the cuts or how positive they will be for earnings next fiscal year," says Mizuho Investors Securities analyst Nobuo Kurahashi.

Another thing that strikes critics as odd: Sony has yet to revise the ambitious three-year agenda of financial targets and product launches that it announced with much fanfare less than six months ago. So far, the company is sticking by its goals for a return on equity of 10% within three years, from 8.6% last year. (Analysts use ROE to gauge how much profit a company is making with the money it has raised from shareholders.)

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businessweek.com
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pp3293d ago

Sony is in Deep Waters trying in vain to stay afloat while Microsoft is Swimming in $$$ from each Xbox360 sold.

digger183293d ago

Is that why Microsoft had to sell nearly all of their 1st Party studios to stay afloat???

Get your facts right wanker!!

Naked-Snake3293d ago

How much is M$ making from each Arcade console sold 1$ ? lol

ultimolu3293d ago

"The Japanese electronics and entertainment giant has already warned that this year's earnings won't be anywhere near the record highs it had forecast back in July. Sony's problems are similar to those of many other top tech manufacturers in Japan. The yen's sharp rise in recent months has eroded Sony's overseas business, where it makes 80% of annual revenues. The economic slowdown and falling electronics prices at home and abroad have only added to the company's woes. "The global financial crisis is hitting the U.S., Europe, and Japan as well as emerging nations' economies," says Sony Senior Vice-President Naofumi Hara. "

This is really, really bad.

I don't want to see Sony or any other company go under.

Nineball21123293d ago

I agree with you Ultimolu. It's already a bad situation with the falling economy and the issues with the Yen exchange rate for the U.S. market makes it even worse.

But, I have faith in Sony. They'll weather the storm. They've been around for quite some time and it's not like they haven't dealt with similar situations in the past.

I hope all gaming companies can weather this.

Darkseider3293d ago

will do just fine and is going nowhere but up.

ultimolu3293d ago

I have faith in them as well. They'll pull through this sooner or later. We just have to hope this situation doesn't get any worse.

It's a terrible time to be losing jobs around Christmas or any time, no matter which company you worked for.