By Alexandra Burlacu | Oct 19, 2012 01:55 PM EDT
Struggling electronics manufacturer Sony will cut 2,000 more jobs by March 2013 in a bid to remain competitive in the market by further restructuring its operations.
According to Sony, the restructuring costs will add up to roughly $370 million annually from the next fiscal year this coming April, but the effect on the company's annual earnings results will likely be minimal.
"As part of its mid-term strategic initiatives announced in April 2012, Sony identified resource optimization as one of the key initiatives for transforming its electronics business and Sony has since been progressively implementing various structural reform measures to optimize costs, streamline its overall organization, accelerate decision-making processes and establish firm foundations for sustainable future growth," reads the press release.
Back in April, Sony announced a "revival" plan that involved cutting 10,000 jobs across its global business, including roughly 3,000 in Japan. This fiscal year, the restructuring efforts would cost Sony $926 million.
In addition to the 2,000 new job cuts announced on Friday, Oct. 19, Sony will also close its Minokamo factory. The facility produces camera and mobile phone lenses and offers customer services for the company's Sony Mobile division. Sony said it will transfer some activities out of the Minokamo facility, but did not provide further details.
The electronics maker is also investing in an early retirement scheme that aims to reduce about 20 percent of the company's headcount at its headquarters in Tokyo by the end of the fiscal year in the coming April.
"In order to optimize personnel structure and assist employees to secure new opportunities outside the Company, early retirement programs will be implemented at Sony Corporation, Sony EMCS Corp. and other major consolidated electronics subsidiaries in Japan. These measures are expected to result in headcount reduction of approximately 2,000 employees by the end of FY12, with approximately half of the reductions (1,000 employees) expected to be in support functions, including the headquarters of Sony," explains the press release.
"In particular, at Sony's headquarters operations where organizational integration and optimization have been actively implemented, a headcount reduction of approximately 20 percent is expected by the end of the current fiscal year through the introduction of an early retirement program and resource shifts."
In its effort to turn things around, Sony is also refocusing its product line on three areas: gaming consoles, digital imaging, and mobile devices. The company has been focusing mainly on making its Sony Mobile division successful ever since the joint venture with Ericsson came to an end a year ago, following a $1.5 billion all-cash buyout from Sony.
As a result of that separation, the Sweden-based operations relocated back to Tokyo, cutting about 1,000 jobs in the process. The Sony Mobile division, a wholly owned subsidiary of Sony Corp, gained 133 percent year-on-year in the company's first-quarter earnings this year, though the mobile unit did not actually exist a year ago.
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