BBC World Service

Sony to cut 10,000 jobs

Roland Buerk Apr 9, 2012

David Brancaccio: The consumer electronics giant Sony is reportedly going to cut 10,000 jobs by the end of this year. That’s a lot — about 6 percent of its total workforce. The Japanese Nikkei newspaper is reporting that its the first major move by Sony’s new CEO, who took over this month.

Joining us from Tokyo is the BBC’s Roland Buerk. Good morning.

Roland Buerk: Good morning.

Brancaccio: Where are the job cuts going to be made? Any idea?

Buerk: Well, we certainly know where half of them are going to be made, because they’re coming from previously announced reorganizations of Sony’s chemical and small- to medium-sized panel-making businesses. The other ones we don’t know, not even whether they’ll be in Japan or elsewhere in the world.

Brancaccio: Roland, what ails Sony? Is it something to do with television sets not selling?

Buerk: Certainly in television sets, it faces increasing competition from the likes of Samsung, based in South Korea. There’s also another long-term problem: Back in the 1980s, if you were jogging around Central Park, you probably had a Walkman. Now you’re much more likely to have a product from Apple. So Sony has lost out, it’s been out-innovated by its rivals, and that’s really what this problem for Sony is. And that’s what the new chief executive is going to have to tackle.

Brancaccio: Now a lot of people also losing jobs, I noticed, at other big Japanese electronics companies. I noticed Panasonic and Sharp. What is going on here?

Buerk: This is a function at the difficulty that industrial Japan is having with the change in the global economic order. The fact is that it used to have much more of an advantage, that it still does have in some ways in terms of innovation and the quality of its products. But gradually over the years, the likes of South Korea, and indeed China, have been catching up and the combination of that and the strong yen that makes it so much expensive to make things here — that’s why these companies are struggling and having to reorganize.

Brancaccio: Well Roland, thank you very, very much for this.

Buerk: Thank you.

Brancaccio: The BBC’s Roland Buerk in Tokyo.

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