Sony To Cut About 10K Jobs

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.

ATRAC and DRM in portable players

[c.r.o.c.o]

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.

Re:Record Label

[Feynman]

slowly laying off staff to try and increase dwindling sales

Of course, laying off staff won't actually increase sales. Decrease costs? Yes.

which is bound to make them a large amount of revenue

Revenue and profit are very different beasts, too.

Believe me...I know these things. After all, I used to work for JDS Uniphase [yahoo.com].

Re:So does this reorg mean...

[tpgp]

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.

Shocking? Sad? No.

[Urusai]

Just another large conglomerate tightening up their balance sheets by firing employees they'll hire back over the next year at a fraction of the salary, perhaps by hiring them from "temp" companies.

I can't see how any /.er would feel sympathy for one of the RIAA's biggest supporters. Remember, this is also the same Sony that thinks you should be locked into proprietary formats (ATRAC, Memory Stick, MD, Beta, whatever).

I personally can't think of a single Sony item I own, either. They can fire all their employees and sink their Board of Directors in the Marianas Trench and I wouldn't care. In fact, they can sink all their "artists" over at the music division and make the world a better place.

Eliminating silos a good thing

[nellardo]

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.

Re:Sony

[blackmonday]

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 very, very popular.

MP3 - Yeah they missed the boat due to their ownership of Content. Oh well, looks like they're learning.

Memory Stick - You can buy these from at least 3 different companies now, and the prices have dropped (although they are still somewhat pricier than CF or SD).

I know Sony has made a lot of mistakes, but Cmon, most electronics companies on earth would love to be in their place. They make very good, very popular units for everything from Tvs to DVD Players, to laptops, on and on. Let's cut them a little slack here. I find few mistakes over the years, taking into account how many successes they've had. Not to mention the PS2, probably the most succesful game console of all time.

That's not a bad track record for one company!

Re:What the hell is going on?

[dauthur]

Sony just can't seem to make the price-point without cutting quality.

Isn't that how it works though? Similar to Subway. They can expand so massively because their costs are so low, courtesy of shit product. Low portions, bad meat, cheap suppliers. This is in contrast to Quiznos, who buys more expensive product that tastes better, better service, larger portions by far, and their meat is sliced in-house. Their problem is though, expansion. It's harder because they spend more on quality. Seems as Sony should do it as well, yes?

Re:Lame Sony

[Elranzer]

Also lets not forget that Sony is the head of *both* of Slashdotters' favorite two orgainaizations: the RIAA and the MPAA.

Re:What the hell is going on?

[bushidocoder]

VCR's, and DVD players have deep market penetration already - there is continuing growth, but its not what it was, and its much lower margin than when the technology is new and booming. Same with PS and PS2 - most everyone who wanted one has one by now.

The phone market right now is being dominated by the mobile manufacturers, and Sony doesn't have a piece of that. Their walkman and MP3 player line was a complete bust because of their ridiculously greedy DRM system and its probably too late to try and compete against Apple in that market now unless they jump on the relatively unprofitable WMP bandwagon. PSPs have sold okay, but they're not the market leader there.

I'm pretty sure that they're still doing okay in the TV market which is a solid growth market, but they have serious competitors that take a large portion of that pie.

I'm no expert in media sales, but I don't think Sony's music and movies have been too high on the charts this year. I might be wrong, I just haven't noticed much of the Sony label. Their content business is huge, and when it takes a hit, the whole company does.

Re:Lame Sony

[Elranzer]

With DVD's, the DVD Consortium makes a profit (this consists of Toshiba, Panasonic/Matsushita, Sony and a bunch of others). Lots of companies make money on the DVD. With Blu-Ray, Sony wants to hog all of the profits for themselves. The market calls for another consortium with not just one company controlling the medium. One would have thought Betamax would have taught them a lesson, cuz they were better than VHS technically anyway.

Considering that despite the lesser storage capacity, the HD-DVD seems to have better DRM and scratch-resistance than the Blu-Ray, I don't see how Blu-Ray is necesarily "better". Plus Blu-Ray players have been announced to need to connect [slashdot.org] to some kind of servers to activate otherwise they "punish" you, as well as having self-destruct codes [slashdot.org].

Re:Dude, what are you talking about?

[Elranzer]

Actually Sony Computer Entertainment consists of about 10% - 30% of Sony's overall sales.

Re:What the hell is going on?

[ThJ]

Sony doesn't have a share in mobile phones? Do a little Google search for Sony Ericsson...