Sony is shutting down a factory and laying off 2,000 employees

We may think that Sony, one of the best known brands in the world of electronics, is doing well profit wise. But that is not true. The company has been at a loss for three years in a row and this is the fourth year. So, the company had made plans of reducing the work force by 6% by March, 2013. The Japanese company is now going ahead with that plan. The company has planned to lay off 2,000 workers by the end of this year. “This reduction will include 20% of staff at Sony’s Tokyo headquarters, and 20% from its Home Entertainment and Sound Business Group.”

Slash Gear writes:

In addition, Sony is closing a factory located in Minokamo, Japan, which will account for 840 of the 2,000 layoffs. This factory is currently responsible for creating DSLR interchangeable lenses, lens blocks, and phones. While part of the Minokamo factory’s production will be pushed to a different factory, Sony alludes to this move being partly performed as certain phone components are phased out.

According to TechSpots, the workforce reduction by Sony will lower its annual fixed costs by approximately 75 billion yen/$379 million for its upcoming fiscal year in April. The reduction isn’t expected to affect the company’s consolidated results forecast for the 2012 fiscal year. Sony hopes this move will help bring its profits back up.

The last fiscal year has been the worst year for the company in the last 60 years with a profit loss of 450 billion Yen, which translates to 7.5 billion in USD. In the last six months, the company’s shares have dropped 42%. The Japanese company expects that its profit outlook for the 2013 fiscal year would be 20 billion Yen, which translates to 257 million in USD. For a company which once ruled the world of home entertainment and the mobile phone industry with its awesome W and K series smart phones, this is sad.

Source: Slash Gear