Sony Announces Restructuring Plans

[Doctor Setebos]

Sony has revealed that the company would be posting a $2.9 billion operating loss for the year, and unveiled a wide swath of cuts and reformations to the company's operations in an effort to obtain profitability by March 2010.

Sony said it would end TV production and design at one plant in Japan and consolidate those operations into another factory, while cutting headcount by 30 percent in operations related to TV design worldwide.
While it was noted that Sony's video game business has also created a significant drag on the company's ailing financial outlook, there was no indication that the Playstation brand would be included in the cutbacks and restructuring.

Source - Reuters (http://www.reuters.com/article/ousiv/idUSTRE50J89M20090122)

[Cit Phil Cit]

I heard that restructuring was a euphemism for transforming: they are going to transform into Voltron and start wreckin' stuff.

[Johan]

This is how capitalism ends. Not with a bang, but with a whimper.

[PathMaster]

Interesting that software will be their focus. I would assume that the Playstation brand would be a primary focus. Games will of course be a big thing, but I do wonder exactly what this means for their hardware side of the Playstation brand? Price cuts for their PS3 delayed? Moved up? R&D on the next Playstation slowed or even stopped.

[Doctor Setebos]

Interesting that software will be their focus. I would assume that the Playstation brand would be a primary focus. Games will of course be a big thing, but I do wonder exactly what this means for their hardware side of the Playstation brand? Price cuts for their PS3 delayed? Moved up? R&D on the next Playstation slowed or even stopped.Where do they say they will be focusing on software? Maybe that was in a previous article, but I don't see it here.

Oh, and...
http://setebos.fathomthat.org/images/random/doom.gif

[PathMaster]

From the other thread (http://www.colonyofgamers.com/cogforums/showthread.php?t=4834) on Cog.

It said Chief Executive Howard Stringer was meeting with resistance from some executives to shifting the company's focus to software from hardware and cutting jobs in Japan.

[Lekon]

See! Its like Kaz said, they are the market leader! they are the best!

Ignore the bombs behind him.

[Doctor Setebos]

From the other thread (http://www.colonyofgamers.com/cogforums/showthread.php?t=4834) on Cog.I think that was just some speculation on the part of the Financial Times. Plus, that article was released before the actual plans Sony just unveiled today. According to Sony, the Playstation area doesn't appear be affected by the cuts.

[Telefrog]

I think that was just some speculation on the part of the Financial Times. Plus, that article was released before the actual plans Sony just unveiled today. According to Sony, the Playstation area doesn't appear be affected by the cuts.

As far as what was officially announced by Sony, the only restructuring details we got was a doubling of the cost-cutting figures, a layoff of 30% of the workforce involved with the TV side of the company, and consolidation of some factories.

There are more details here (http://www.thestreet.com/story/10459129/1/sony-forecasts-fiscal-loss-more-cost-cuts.html) including the fact that Stringer and other executives have given up their bonuses and some will be getting a pay cut.

Of course, what a company announces and what it really does are two different things. There could be a "reevaluation period" for the Playstation side of the house or not.

[Cyndair]

Sony needs to get competitive price-wise with their TVs. I just went through the headache of choosing a new HDTV last week and Sony didn't even factor in for me since their prices were so much higher than the other brands. They make nice TVs, don't get me wrong, they just cost too damn much for what you are getting. They've gotta cut out this whole elite-niche pricing thing. The market just isn't there in this economy.

[Doctor Setebos]

There are more details here (http://www.thestreet.com/story/10459129/1/sony-forecasts-fiscal-loss-more-cost-cuts.html) including the fact that Stringer and other executives have given up their bonuses and some will be getting a pay cut.

Of course, what a company announces and what it really does are two different things. There could be a "reevaluation period" for the Playstation side of the house or not.Very true. You are absolutely correct that what a company says is going to happen and what actually happens can be two very different things.

GamesIndustry is reporting (http://www.gamesindustry.biz/articles/sony-job-cuts-unlikely-to-affect-games-division) that Sony sent out an internal memo stating that the games division would not be affected by cuts in staff.

However, Sony Computer Entertainment Europe president David Reeves has informed staff internally that the JPY 250 billion (USD 2.8 billion / EUR 2.1 billion) cost-cutting measures will not include a reduction in games staff, as previously stated last month.

"This is still the case. He has just sent a message to employees here to that effect," said a spokesperson for Sony. "As was the case with the previous Sony restructuring announcement this mainly concerns our electronics business."

[Johan]

According to Sony, the Playstation area doesn't appear be affected by the cuts.

No division can escape being affected by the loss of such a huge amount of money. It's like expecting my head to remain unaffected by the loss of my arm and leg.

They may not cut staff there, but there will be an impact. It may be as subtle as a loss of bonuses, or a freeze/cut in pay, or a draw-down in number of titles in development, or a tightening of employee expense allowances.

There will be an impact. We just don't know how much yet.

[Cit Phil Cit]

Here is same thing from the other side:
http://ca.news.finance.yahoo.com/s/22012009/24/f-afp-microsoft-cut-5-000-jobs-earnings-fall.html

[Johan]

Here is same thing from the other side:
http://ca.news.finance.yahoo.com/s/22012009/24/f-afp-microsoft-cut-5-000-jobs-earnings-fall.html

They MADE money!!??!! :eek:

Releasing its results for the second quarter of its fiscal year, Microsoft said net profit fell by 11 percent from a year ago to 4.17 billion dollars on revenue of 16.63 billion dollars, a two percent increase over a a year ago.

The Redmond, Washington-based company said earnings per share were 47 cents, less than the 49 cents per share forecast by analysts.

For nearly every four dollars they took in, one was profit. WOWzers. Man. That's amazing.

[Cit Phil Cit]

They MADE money!!??!! :eek:



For nearly every four dollars they took in, one was profit. WOWzers. Man. That's amazing.

They're cutting 5000 jobs, 1500 immediately. You can always make money doing it that way.

Q4 for the win.

[Johan]

They're cutting 5000 jobs, 1500 immediately. You can always make money doing it that way.

Q4 for the win.

Fail. You discount a huge profit in the face of the worst economic circumstances in nearly a century. :shakes head:

They're not going to realize immediate/retroactive savings from those cuts. In fact, those cuts will COST them profit in the short run (severance packages and the like).

It is amazing that they were able to make FOUR BILLION dollars in this economy, and grow their revenue as well. That's unbelievable leadership within their company.

Amazing.

This is why Sony wants to transition to software. The margins are much better, and the competition, while cutthroat, is not what it is in hardware (with the Koreans, Chinese, and others breathing down your neck).

[Cit Phil Cit]

Fail. You discount a huge profit in the face of the worst economic circumstances in nearly a century. :shakes head:

They're not going to realize immediate/retroactive savings from those cuts. In fact, those cuts will COST them profit in the short run.

It is amazing that they were able to make FOUR BILLION dollars in this economy, and grow their revenue as well. That's unbelievable leadership within their company.

Amazing.

You should see the oil companies! Playing quiet right now, as they warm their mansions with money furnaces.

You should complain to Yahoo for writing a negative article about Microsoft, I just posted the link - you keep running with it.

[Johan]

You should see the oil companies! Playing quiet right now, as they warm their mansions with money furnaces.

That's true. Then, they would yell at you that, "That's not FAIR. Our margins are LOWER than most other industries margins!"

Then, I would punch them in the face and take some of their money while it's still burning. :D

[PathMaster]

Just because the PS division won't be seeing layoffs does not mean cuts will not happen in some way. Less funding, or maybe more $$ towards software as I mentioned.

[OldJadedGamer]

According to Sony, the Playstation area doesn't appear be affected by the cuts.

This is according to David Reeves... easily the dumbest person inside of Sony. Btw, he is also the same person who said the very first PS3 units ever made would be PAL units.

David Reeves is like the George Bush of Sony.