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Forums - Sony Discussion - Sony slashing jobs, leaving unprofitable businesses

The Fury on 09 December 2008

Welcome to the financial mess the bankers have got us into. I applaud you bankers for making the world a better place.

Now, read the above sentence and replace all the 'b's for 'w's.



Hmm, pie.

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NJ5 on 09 December 2008
kowenicki said:

Some odd reactions here.. this is not good news and I dont understand how it can be seen as such. Many market commentators are still not happy and wanted to see much more from Sony.

(...)

"The number sounds big, but this staff reduction won't be enough," said Katsuhiko Mori, a fund manager at Daiwa SB Investments.

"Sony doesn't have any core businesses that generate stable profits - the next thing we want to see is what is going to be the business that will drive the company."


It is not enough in the sense that they'll still be having unprofitable quarters. $1 billion per year is at least 4 times less than the yearly losses I would expect from here on (not for this fiscal year as we're already halfway through it, and the first half was profitable). That's just for the currency problem btw, meaning before accounting for sales drops due to the recession.

 



My Mario Kart Wii friend code: 2707-1866-0957

arsenicazure on 09 December 2008
The Fury said:
Welcome to the financial mess the bankers have got us into. I applaud you bankers for making the world a better place.

Now, read the above sentence and replace all the 'b's for 'w's.

This

 



Doubt is not a pleasant condition, but certainty is absurd.

owner of : atari 2600, commodore 64, NES,gameboy,atari lynx, genesis, saturn,neogeo,DC,PS2,GC,X360, Wii

5 THINGS I'd like to see before i knock out:

a. a AAA 3D sonic title

b. a nintendo developed game that has a "M rating"

c. redesgined PS controller

d. SEGA back in the console business

e. M$ out of the OS business

Imthelegend on 09 December 2008
The Fury said:
Welcome to the financial mess the bankers have got us into. I applaud you bankers for making the world a better place.

Now, read the above sentence and replace all the 'b's for 'w's.

How have the w*nkers made the world a wetter place?

 



 


 

EaglesEye379 on 09 December 2008

The reason for Sony's downturn is the loss of significant market share in phones and games, and to a certain degree TVs.



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NJ5 on 09 December 2008
EaglesEye379 said:

The reason for Sony's downturn is the loss of significant market share in phones and games, and to a certain degree TVs.

That's just one of the reasons. The currency issue people mention all the time is very important too. 80% of their sales are outside Japan, and the Euro/Dollar have dropped 15-25% since last year, with some other currencies dropping even more (British Pound, Australian dollar etc).

 



My Mario Kart Wii friend code: 2707-1866-0957

The Fury on 09 December 2008
Imthelegend said:
The Fury said:
Welcome to the financial mess the bankers have got us into. I applaud you bankers for making the world a better place.

Now, read the above sentence and replace all the 'b's for 'w's.

How have the w*nkers made the world a wetter place?

...global warming?

 

 

 

I did put that in there on purpose though. :P

 



Hmm, pie.

NJ5 on 09 December 2008

Some more details from a bloomberg article:

“As the tougher business environment is ahead of us, the company might suffer from a bigger earnings decline in the second half, or even losses, if it doesn’t take any measures,” said Hiroshi Sato, chief investment officer of Tokyo-based GCSAM Co., who sold his Sony holdings. “I can’t see how the company will regain its charm with consumers.”

The Bravia-brand TV maker said it will “adjust” pricing to cope with the stronger yen, two weeks after saying it didn’t have plans for “massive cuts” in prices in the U.S.

Sony will invest 30 percent less in its electronics business than planned under its mid-term strategy, it said, without giving figures.

The company plans to reduce more jobs by losing temporary workers in electronics, responsible for about two-thirds of sales. It will also cut the number of manufacturing sites by 10 percent by the end of next fiscal year, from 57 currently.

Sony will postpone investment plans at its Nitra plant in Slovakia that assembles liquid-crystal display televisions for the European market. The electronics maker plans to end production at two overseas manufacturing sites, including one in France that produces tape and other recording media.

The part about adjusting pricing in USA to compensate for the strong yen is especially alarming. Are they going to raise prices like they did in the UK? Samsung must be having an orgasm right now.

 



My Mario Kart Wii friend code: 2707-1866-0957

EaglesEye379 on 09 December 2008

@NJ5

True, the FX risks magnify the problems, but the more worrying thing are the loss of margins on the core businesses - Electronics/Sony Ericsson which in part is due to FX but also due largely to cost of sales deterioration.

And we know the Game division isnt going to be the juggernaut as it was in the last decade - at least not for the next year. FX risks can be weathered if the underlying profits are at least stable and not on a decreasing slope like they are now.



EaglesEye379 on 09 December 2008

And I believe the next big thing in TV - the OLED technology will give Sony a true run for its Bravia profits - Samsung is catching up very quickly. Its already happening - they have to be at a more competitive price for their Electronics products which will dent their margins.

This has led to their strategy of raising the prices for Electronics - so they are banking on the sales volume to stay constant with higher prices. I think this wont turn out well because of the competition as I mentioned earlier - but who knows, the Bravia LCD still sells alot.