Sony offers early retirement plan as part of job-cutting efforts

Monday, November 28th 2005, 10:54 am
By: News On 6

TOKYO (AP) _ Sony Corp. has started offering early retirement to workers as part of its plan to cut 10,000 positions worldwide, an official for the consumer electronics and entertainment company said Monday.

The Tokyo-based manufacturer of the Walkman audio player and PlayStation video game console in September vowed to revive its ailing electronics operations with a range of reform steps over the next three years, including slashing 4,000 Japanese and 6,000 overseas positions by the end of March 2008.

The company started offering early retirement packages Friday to workers in noncore operations, such as human resources and accounts, according to the official who cited company regulations for requesting that she not be identified by name.

Managers and rank-and-file workers who have worked at least 10 years are eligible, and Sony will accept applications until Feb. 15, the official said, but declined to give a target figure for the program. Engineers are excluded from the latest voluntary retirement offer as Sony looks to maintain its R&D capabilities, she said.

On top of trimming jobs, Sony's turnaround plan _ unveiled by chief executive Howard Stringer on Oct. 22 _ calls for the closing of 11 of its 65 manufacturing plants and shrinking or eliminating 15 unprofitable electronics operations by March 2008. The company has refused to say what those businesses are.

Sony's profits in the latest quarter dropped by nearly half from a year ago, as electronics sales stayed flat, its movies business stumbled and earnings suffered from a heavier tax burden and losses related to equity holdings.

The company reported group net profit of 28.5 billion yen ($246 million) for the three months ended Sept. 30, down 46 percent from 53.2 billion yen the same period a year ago, as healthy demand for the PlayStation Portable handheld machines were offset by shakier performance in the company's core electronics unit, hurt by falling sales of plasma TVs and digital cameras.

Ratings company Standard & Poor's last month cut its credit rating for the company, citing doubts about the company's restructuring plan. Moody's Investors Service has also put Sony on review for a possible cut on grounds it will be hard for Sony to achieve the earnings success it had in the past.