Alright, we all know the economy is in bad shape. Workers across the nation are being laid off left and right. And, unfortunately, these layoffs aren’t limited to non-gaming companies: Microsoft and Sony are planning to implement massive cuts within the next week or so.
Sony will finally be confirming and explaining their grand restructuring scheme later this week. Here’s what we know so far: it will involve the layoff of 16,000 workers to save the company $1.1 billion annually. Also, the company plans to close five or six manufacturing plants to further cut costs. But will that be enough? Analysts are already saying that Sony will need to do more to battle this downhill economy.
Here’s Sony’s biggest problem: the yen, Japan’s currency, is appreciating. That may seem like a good thing for the Japan-based company but, since three-quarters of its business are overseas, a stronger yen eats into overseas profits as Sony has to convert the purchases back into yen. Also, its harder to stay cost competitive when shipping to areas with weaker currency.
“If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive,” said Mitsushige Akino, the chief fund manager of Ichiyoshi Investment Management.
There is still no information about the gaming division’s role in these cuts and restructuring plans.
Microsoft, on the other hand, isn’t doing as bad. Don’t get me wrong, the company is still in rough waters, but its not in as bad a shape as Sony.
Microsoft is expected to cut 6,000 to 8,000 jobs from lower than expected profits. Like Sony, it’s unknown how many, if any, of those cuts will be in the gaming division.
In other news, Nintendo seems to be doing just fine.
http://secondstorygamer.com/2009/01/sony-microsoft-layoffs/
