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Sony To Cut About 10K Jobs 178

Posted by Zonk
from the fewer-trinitron-crafters dept.
Pichu0102 writes "Reported by the Washington Post, Sony says it will cut about 7% of its jobs as well as sell about $1 billion of it's assets. It also will declare a loss for this year." From the article: "To help boost efficiency, Sony said it has abolished the company system that Stringer said was preventing different business units from communicating freely, causing overlap in development and missed opportunities in the market. The electronics group will be reorganized to place centralized decision-making over key business areas under Ryoji Chubachi, who became Sony's new president and electronics CEO in a major overhaul of management in June." Another reorg on the heels of Microsoft's decision from earlier this week.
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Sony To Cut About 10K Jobs

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  • by scovetta (632629) on Thursday September 22, 2005 @01:32PM (#13622901) Homepage
    Sony said it has abolished the company system that Stringer said was preventing different business units from communicating freely...

    Sony is going Open Source???
  • Hmm... something about this sounds fishy. Outsourcing, PS2 and other suches do not sound like "a loss for this year". Sony should be booming, considering. Perhaps it's a marketing technique? We'll soon see.
    • No, it's just Sony trying to maximize profits in order to please the shareholders. Biggest source of expense in a company is usually payroll.

    • Hmm... something about this sounds fishy. Outsourcing, PS2 and other suches do not sound like "a loss for this year". Sony should be booming, considering. Perhaps it's a marketing technique? We'll soon see.


      No, nothing's really fishy. Excepting the play station, how many electronic products do you consider buying that have Sony at the top of the list?
  • I feel for the people losing their jobs... Will the be compatible with other companies?
  • by Dark Paladin (116525) * <jhummel@@@johnhummel...net> on Thursday September 22, 2005 @01:34PM (#13622924) Homepage
    That Sony electronics will have greater control over their products?

    My understanding may be flawed, but it seemed that the Electronics division was having problems with the Entertainment division sticking their nose in and making life difficult. Instead of having an MP3 player, they had ATRAC players that would convert your MP3's for you. It was only after the first release tanked they brought out a new line that would natively play MP3, ATRAC, and (I think) AAC.

    If the Electronic division is allowed to flourish and tell Entertainment to mind its own business, they will probably stand a greater chance to make products that people want, instead of want the Entertainment division wants to control.

    Of course, this is all just my opinion - I could be wrong.
    • by Anonymous Coward
      Yeah, but what use will the products from the Electronic division be when the entire Entertainment division goes tits up because of piracy?
      • Sony's attempts to circumvent piracy by releasing a crippled "MP3" player were less than futile. When the old business model starts to fail, you shift focus to the new business model that is working.
        • Agreed - I think that Sony spent more money and effort fighting "piracy" when they really meant "lock in", and paid the price for it.

          There are legitimate ways of fight piracy (going after black market mass CD production dealers, for example) that are more effective than annoying customer base.
      • The entertainment division is basically the only profitable part of sony right now.
    • Damn, you beat me to it while I was searching the slashdot archives for the relavent story about how Sony admitted that ARTAC was dumb.
    • Speaking as a person who bought one of those 'ATRAC only-ReRip all of your CD' devices from Sony, Id have to say you're right on the money...
    • According to the FA:

      "... We are going to achieve our goals by breaking down the existing silo walls and eliminating the highly decentralized structure we've maintained in the past," said Stringer, a former journalist..."

      So, no. Electronics will not have greater control over their products. Think "greater control" and "division" as in "Stalin" and "Communism".

    • ATRAC? I didn't buy one because I thought the salesman was trying to sell me an 8-Track!
    • by tpgp (48001) on Thursday September 22, 2005 @02:01PM (#13623154) Homepage
      That Sony electronics will have greater control over their products?

      I doubt it - Stringer was (and still is) head of Sony US. Most Sony US profits came from content licensing - not eletronics.

      Before Sony, he was president of CBS Broadcast Group (who make content and not electronics)

      PBS has an interesting interview [pbs.org] with Stringer, where his philosophies are pretty much stated:

      If you take general copyright-based products, the United States pretty much dominates the world. It's the fastest growing aspect of our GDP, about 5 percent of the GDP, about $80 billion of overseas sales in simple copyright-based entertainment of one kind or another

      I think its pretty obvious where this guy is coming from and what Sony are expecting from him.

      We can expect worse from Sony in the future. Not better.
      • Hmmmmn, rereading my post - I realize it needs a little clarification.

        Howard Stringer is the CEO of Sony. He stepped into this post recently. The 10k job cut is the first significant move Sony has made under his stewardship.

        His successful background is in selling copyright, the fact the Sony has put him in charge has made it clear that Sony entertainment has won the turf war with Sony electronics.

        Coupled with the cuts (that have hit robotics research and high end product development) we can expect Dell-like
  • by Radres (776901) on Thursday September 22, 2005 @01:37PM (#13622952)
    The recording side of Sony had no trouble communicating to the MP3 player side [slashdot.org] the fact that they should do what they can to restrict users from copying songs freely. Stupid things like forcing users to convert from MP3 to ARTAC and limiting them from copying a song more than 3 times (which was easy enough to circumvent) still leaves me with a bad taste in my mouth 5 years since I received a Sony "MP3" player for Christmas that at the time was worth $300.
  • by Anonymous Coward
    In a stunning move to increase its literacy level to the grade 3 level, Slashdot editors announced that they will eventually learn the difference between ITS and IT'S. Although no time table was given, pundits think that 15 years from now, a Library of Congress full of Beowulf clusters of unused apostrophes might accumulate because of this.
  • by Anonymous Coward
    This is just the first byproducts of the management shakesups that happened in Sony at the beginning of this year (new CEO, recognition the company was poorly coordinated, etc). It has nothing to do with Microsoft.
  • A symptom (Score:5, Insightful)

    by keraneuology (760918) on Thursday September 22, 2005 @01:39PM (#13622976) Journal
    This is what happens when one half of your company is fighting with (and suing) the other half: either decide to sell music and movies, decide to sell mp3 and DVD burners, or find something other than an arms race to struggle to create/defeat unbreakable protection schemes.
  • Sony needs to separate its hardware and entertainment division. This has been the major cause of their lack of focus and therefore lack profitability. FTA it seems its competitors are only in hardware.

    Maybe Stringer is (slowly) turning it into a pure hardware company.
  • Sony (Score:5, Interesting)

    by mikers (137971) on Thursday September 22, 2005 @01:41PM (#13622992)
    Yeah, I remember when I stopped buying Sony products. Probably about 6 years ago today. My guess is that is probably when their troubles started.

    Sony has this nack for being extremely hard-headed. They stuck to their Beta machines, and missed the entire VCR explosion; they stuck to minidisc and DPMS (copy prevention tech) and refused to even license the technology for the longest time. Copying from minidisc has always been severely hobbled.

    Sony Trinitron was the $hit for many years. Except when they got ridicously over priced.

    Then Sony missed the whole MP3 bandwagon, instead pushing their ATRAC DPMS enabled system -- which nobody wanted (sounds like Beta all over again).

    Memory Stick -- another locked down format from Sony.

    Turns out Copy protection schemes just don't sell very well (exception: IPod .. not the rule).

    m
    • Re:Sony (Score:3, Insightful)

      by Anonymous Coward
      It isn't so much that Sony is "hard-headed" but rather than they don't seem to be able to learn from their mistakes. One mistake Sony seems to have made repeatedly is to try to market proprietary media formats. All the examples you mention are examples one or both of two mistakes:

      Betamax vs. VHS: Betamax was there first, but noone wanted to deal with Sony's excessive licensing requirementss.. Their competitors told Sony to get fscked and defined a new, free format: VHS.

      Minidisk: Yet another proprietary f
      • Re:Sony (Score:3, Insightful)

        by doctor_no (214917)
        What's with everybody bashing Sony for "propritary" formats. It seems rather hyprocritical being that the alternatives are also proprietary formats as well. VHS, SD, MP3, AAC, etc are all proprietary formats that require licencing fees and royalties just like Sony's formats. The only difference is that they mananged win their respective format wars, and losing format is usually then marked as "proprietary".

        You should also remember that Sony did manage to create two of the most sucessful formats around.
        • VHS, SD, MP3, AAC, etc are all proprietary formats that require licencing fees and royalties just like Sony's formats.

          Right, but the difference is that those formats' license fees are far lower. The main reason all the electronics companies went with VHS instead of Beta was because Sony's license fees were too high. Same for ATRAC vs. MP3; MP3 license fees are cheap (although still too much for open-source). Additionally, these other standards are open, if you're a company wanting to make products based
      • My cheap 17 dollar 7in1 reader reads memory sticks.
        Enermax, same people that make the power supplies.
        It works exactly like a USB drive and plugs in a USB port.

        Don't know the model, it doesn't have one printed on it but it's got a blue LED and shows up as four USB devices.

        Review: http://www.cluboc.net/reviews/card_readers/enermax /aluminum7n1/ [cluboc.net]

        lsusb shows:

        ID 05e3:0710 Genesys Logic, Inc.

        dmesg shows:

        Attached scsi removable disk sda at scsi3, channel 0, id 0, lun 0
        Vendor: Generic Model: STORAGE
    • Agreed. They've always been locked down to their own formats. I have to confess that I've liked their design aesthetic, but good looks only go so far.

      My main beef with Sony (apart from their tightfisted approach to formats) is that their laptops and desktops all use proprietary versions of hardware and drivers. You can only get the parts from sony, and you have to use the sony-fied drivers or you get crap.

      One example I'll never forget is when my old boss told me that he wanted the OS on his micro-tiny v

    • The thing is Sony gets a lot of support in Japan for these formats. It's like Americans buying American cars. They're probably more than a little blinded by the success at home and need a central power structure who can look outward and realize the future lies in open standards for the whole world, packaged in the nicest possible way. They can take a lesson from Apple.
    • Re:Sony (Score:3, Informative)

      by blackmonday (607916)
      VHS - They didn't miss the VHS bus entirely. You can still buy Sony VCRs. Don't forget, they sold (and still sell) a shitload of DVD players and DVD recorders.

      Minidisc - They sold a lot of Minidisc equipment in Asia, but not necessarily in the US. I have a minidisc recorder. It's still my favorite way to record through microphones and radio broadcasts. Plus they didn't solely rely on Minidisc. They made good CD Players, and nowadays their mid-range DVD players are very good.

      Trinitron - The Wega TV was v
    • Sony has some of the finest electronics on the planet. They do a really good job of design and manufacturing. What has happened seems to be the standard bussness cycle. Small firm becomes succesful by playing fast and loose, then, as they grow, these same entities become addicted to those same rules they shunned in the first place, or, even worse, start creating rules that insure that other firms cannot be as innovative.

      This was the case of Disney, IBM, MS, and all these companies are now suffer, or wi

  • by c.r.o.c.o (123083) on Thursday September 22, 2005 @01:41PM (#13622993)
    Pretty much every music device that Sony released was crippled in one way or another. I loved the MD format, long battery life, and the ability to store the equivalent of 128Mb of MP3s on a $2 disk. But all of Sony's MD, CD and flash players would only play ATRAC (or a variation thereof). This would not have been a problem if ATRAC were an open standard.

    But converting MP3s or CDs to ATRAC required Sony's drivers and software (which never worked in Linux). This HAS to be the buggiest and most DRM ridden software I ever used. I was so frustrated with it that when I got a free 128Mb RCA Lyra MP3 player, I just sold my MD player and the 50-ish MDs that I had (40 of them blank, because I couldn't bring myself to record them all).

    Sony may have added support for other formats recently, but I got burnt once with their MDs. Unless they offer compelling new features over their competition, I don't see a reason I'd ever consider another Sony product.
  • by xxxJonBoyxxx (565205) on Thursday September 22, 2005 @01:41PM (#13622997)
    Call it the iPod effect - Sony's stockholders were not too pleased to see the people who brought you the Walkman get smacked around by the fucking iPod.
  • by joelparker (586428) <joel@school.net> on Thursday September 22, 2005 @01:43PM (#13623012) Homepage
    Sony was my final project for my recent Strategic Business Management course.

    My group found that Sony's division conflicts were ruining Sony's strategic opportunities. A simple example is Sony's music division prohibiting Sony's electronics divsion from building DRM-free MP3 players.

    A more complex example is Sony's movie division failing to work with with Sony's games division-- thus we get the PSP that can play movies, but there's no Sony "iMovies" store ready. What a strategic goof!

    Our strategic management recommendation was for Sony to bring in new leadership, specifically someone to rock the boat and get the divisions working together.

    • You goofed slightly. The lack of "iMovies" store is an entirely deliberate, conscious decision prompted by the move to sell UMD films. In my opinion a decision that Sony might come to regret, given how expensive UMD films are compared to DVDs, but time will tell.
    • And they also messed up their purchases of entertainment software developers. Instead of just leaving the companies to get on with the business of making games, they started micro-managing project staff/task allocations. Needless to say, this led to many veteran programmers leaving to set up their own companies - which in some cases were directly across the road from the main studio.
  • Television Company (Score:2, Interesting)

    by Anonymous Coward
    Sony made it as a television manufacturing company. They never completely understood other businesses. Their shotgun approach at trying other products occasionaly got lucky and often were complete failures alienating some customers. I've been burned so many times by Sony gizmo failures that I gave up on them.

    Sony has forgotten about the rigourous quaility control and innovation that made them a manufacturing giant. Like many big technology companies, they have been taken over by marketeers and accountan
    • The visionless have replaced the visionaries and Sony remains a cautionary tail for companies and nations that abondon mercantilist precsion for globalist rhetoric.

      I dunno. I like my companies and nations with a little extra backside.
  • Is that 10K decimal : 10,000

    10K hex : 65,536

    or

    10K binary: 10,240 ?? ( I just hate my Sony car CD player-- no way I see to turn off the barber-pole advertising-- front-panel eject button too easy to hit-- other buttons too hard to hit-- and it often thinks it has a CD in it when it doesnt-- yechhh! )

  • by dbfruth (707400) on Thursday September 22, 2005 @01:53PM (#13623092)
    Sony has been on a downward slide for quite some time. If they could just get over their "not invented here" mentality and not try to reinvent the wheel every time a new technology comes along. There is nothing wrong with taking something good and simply making it better and more compelling. If Sony made cars it would have square wheels and they would convince you that it was much better that way since you didn't need brakes anymore which by the way were also not invented at Sony.
  • Reorg overdue (Score:4, Insightful)

    by starfishsystems (834319) on Thursday September 22, 2005 @01:54PM (#13623098) Homepage
    This is a good development for Sony. Its organizational structure has been overpartitioned for a long time, so that it has functioned not as a single organism but as several, sometimes competing, ones.

    For example, Sony used to have something like five different divisions which developed and marketed video cameras. This kind of effect is going to arise sooner or later in any large organization, but a bit of refactoring and consolidation now and then has to be a good thing.

  • by Seumas (6865)
    a major overhaul of management in June

    Should be read as "bonuses for management, layoffs for everyone else".
    • It should mean a lot of duplicate management goes away. A lot of companies are dumping higher end people and keeping the low wage ones. Raytheon and Honeywell are two examples. Both shed a lot of engineers recently and both just cut about 10 percent more. Very worrisome to some friends but they cut higher wage engineers at both companies.
  • by nellardo (68657) on Thursday September 22, 2005 @02:07PM (#13623204) Homepage Journal

    I haven't read Howard's announcement in detail yet, but my first impression is pretty good. Several years ago, I worked for Sony Corporation of America (for a while there, Howard was my boss's boss). Getting the different operating companies to work together for the good of the larger corporation was extremely difficult. Management for each operating company was compensated based on the performance of that individual operating company. Music execs got paid well when they sold lots of music. This went down to a fairly fine grain - Sony Classical was extremely happy to have the soundtrack to "Titanic" on their label. There was no motivation for the music company to do something to benefit the electronics company, and vice-versa. The Playstation company was making so much money, they went off and did their own thing entirely.

    Eliminating the barriers between the operating companies will be a painful transition, but all in all, probably a good thing.

    I'm not particularly in favor of eliminating jobs, though 7% over half a year isn't much - most of that is probably natural attrition. When Sony cut jobs while I was there, it was all attrition, and I think it was 4 or 5%.

    The market doesn't seem to like it - Sony is down about 100 yen against a share price of 4000ish since the announcement, but the market may have been expecting something more dramatic. Anyway, my initial $0.02.... ObDisclaimer - I haven't worked there for years, I don't consult for them, and I don't own their stock.

  • or maybe they need to start buying start ups instead of trying to create there own proprietary stuff, big companies are bad at innovation cause their existing technologies and products tend to prevent it.

    accoriding to paul graham, big companies can't do product development. [paulgraham.com]

  • Sony, blechh (Score:4, Insightful)

    by yagu (721525) * <yayagu.gmail@com> on Thursday September 22, 2005 @02:29PM (#13623381) Journal

    Ever since I invested heavily in MD equipment first introduced by SONY, willingly paying the bleeding edge tax for what I thought was cool technology, and ever since Sony kept a white-knuckled grip on the control and licensing of that technology, effectively keeping the price sky high, and effectively killing it as a potential great medium, and effectively rendering my speculative investment worthless, I've avoided them like the plague.

    Sony is very close to being the Microsoft of the electronics industry, except they haven't managed to garner the same dominant position (percentage-wise) in the electronics market as Microsoft has in the OS/software market. But, they keep trying with heavy-handed business practices, sky high (artificially) pricing, and proprietary non-interoperable (think memory sticks, "mp3" (heh) players, etc.) gadgets.

    Maybe this shakeup can bring a change in attitude, a change in latitude, to their approach. I doubt it. But I can hope.

  • Seriously, 'editors', I'll copy-edit this stuff for you for nothing, or you can continue to be scoffed at by third graders. Your choice.
  • As soon as their next-generation Lean Mean Creativity-Reducing Gaming Machine comes out, they'll soar to the top among sequals and remakes and over-bloated polygon counts.
  • I dont care what Sony says, this is so they can help ease the loss of money when they sell a PS3. It makes perfect sense, we hear about how Sony could stand to lose billions selling PS3 at a loss, whats an easy way to make up some of that money? Fire people.
  • Would this be the first Wookie ever to head a major corporation?
  • ...said "Take a Walk man".

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