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Layoffs may not help Sony’s bottom line

Eve Troeh Apr 9, 2012

David Brancaccio: The Sony corporation is reportedly going to cut 10,000 jobs by the end of this year. That’s a major hit, about 6 percent of the total workforce of the consumer electronics giant.

Marketplace’s Eve Troeh has more.

Eve Troeh: When he took over this month, Sony CEO Kazuo Hirai promised whip the Japanese giant into fighting condition. It hasn’t turned a profit in four years. The job cuts — 6 percent of Sony’s workforce — will come from selling off side businesses and likely cuts to manufacturing.

Jeff Kingston at Temple University in Tokyo says huge layoffs are rare in Japan. And there’s not much hope the cuts will lead to Sony’s recovery.

Jeff Kingston: Most people here think Sony’s best days are behind it.

If Sony products aren’t moving, why make so many? Says Roger Kay at Endpoint Technologies:

Roger Kay: People don’t buy TVs very often, so the TV market is highly saturated, and Sony is sitting in a position where they have a lot of inventory.

He says to make money the company must develop hit products, like its notebook computers a decade ago, and bring back the brand’s reputation for innovation.

Kay: Steve Jobs at Apple used to say that he hoped that his company would some day be kind of like Sony.

A recent Nikkei survey asked Japanese consumers to name the best brand. Their favorite? Apple.

I’m Eve Troeh for Marketplace.

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