Sony To Cut 8,000 Jobs Citing The Poor Economy

By Joe Haygood | December 9, 2008

Sony announced today that they would be taking some cost cutting measures to cut some of the losses that they have been taking in the recent financial quarter.  Included in those cuts is a 4% cut to Sony’s workforce of 185,000, coming out to 8,000 jobs.

Sony, the maker of the Playstation 3, LCD TVs and Blu Ray players, has been hit by softened demand around the globe.  Sony is especially hurt by the exchange rate that does not favor them, due to 85% of their business occuring outside Japan.  When goods are cut in price here in the States or in other markets like Europe or Africa, the loss in revenue hurts Sony even more because those goods cost more to make in Japan, and then they lose when the profits come back home to be converted back into Yen.

Other cost cutting moves include cutting production of LCD TVs in Slovenia, due to lack of demand for high ticket goods.  Sony has also cut production in other areas as well, to try and reduce backlogged inventory.

The current economic sitution may also be playing into the reasoning behind why Sony has not cut down the price of the Playstation 3.  They may not be able to afford the extra losses it would incur, as they would lose money on the front end of the sale, as well on the back end when the loss is exchanged into Yen.

via msnbc.com