12-09-2008 #1Takavach Guest
Deathwatch: Will the Sony Empire Fall in 2009?
We hesitated in adding a global manufacturer like Sony to Bitterwallet's Deathwatch list; it's all very well predicting the End of Days for Woolies and PC World, but not one of the best recognized brands on the planet, surely?
Until you look at some of the facts and figures haunting the Tokyo-based company right now:
* Sony have today announced plans to make 5% of its electronics workforce redundant - about 8,000 jobs
* From July to September, the Japanese economy shrank nearly five times faster than Government predictions
* Sony's profits fell by 90% in the last financial quarter, while warning that full-year profits would be down nearly 60% on the previous year
* The company's share prices has dropped from over $57 at the beginning of the year, to just $20 today
Of course there's a recession going on, so what do you expect? The number of job losses, as significant as it sounds, is small potatoes when compared to the 160,000 employed by Sony's electronics division. And the point of such drastic action is to help save Sony over £745 million and ensure the company can weather the financial storm long-term.
But not everyone agrees with the strategy; not because they don't recognise the benefits of being shrewd in these interesting times, but because Sony simply isn't famous for anything in particular, and hasn't been for years.
Televisions, laptops, speakers, DVD players - there's no one product where Sony rules the hearts and minds of the consumer, unless your name is Sam Beckett and you travel through time to the early 1980s on a regular basis. And it's this lack of core product that will be its undoing, according to many analysts - including Katsuhiko Mori at Daiwa SB Investments:
"The number [of redundancies] sounds big, but this staff reduction won't be enough. Sony doesn't have any core businesses that generate stable profits. After the workforce reduction, the next thing we want to see is what is going to be the business that will drive the company."
So who knows? Sony are on the official Deathwatch list for now (there's nothing very official about it, to be honest - it's written in biro) - unless anybody can give us a really good reason to take them off? More PlayStation 3 News...