Sony - Kaboom - Financial Meltdown etc

[JP]

It's a shame when people lose their jobs but to be honest, this should have happened quite some time back in Sony and although they have slowly been moving over to the content delivery side of the business it's really not been happening quickly enough.

I wouldn't be surprised to see a lot of the manufacturing plants close as it's been clear for some time that it's far cheaper to outsource instead of them building the hardware themselves. They've been doing it with chip production for a couple of years and and a lot of the other hardware really needs to go.

They've recently spent vast amounts of money dumping The Bertelsmann Group which has cost them a fortune over the past few years due to their 50/50 partnership in BMG. I'd wouldn't be surprised to see them get rid of Ericsson fairly sharpish too as they've mad some fairly bad business choices over the past couple of years.

I'd imagine that much of the Japanese management will be completely restructured and Stringer will be given complete control over the various divisions in the company and that is well overdue.

As I said, it's a real shame that people will lose their jobs but the companies structure is close to what it was like nearly 50 years ago and they can't realistically expect that to work today no matter how good or bad the economy is.

[Matt]

It a disgrace that a company making the kind of money Microsoft does is considering such huge job cuts.
The credit crunch is just the excuse some companies needed to make cuts and increase shareholder value.

Agree 100% **** the shareholders and a bump in the share price, keep the WORKERS. It's not like MS haven't got a penny or two in a bank somewhere to keep those people paid.

[EJG1980]

It a disgrace that a company making the kind of money Microsoft does is considering such huge job cuts.
The credit crunch is just the excuse some companies needed to make cuts and increase shareholder value.

Spot on. Instead of sacking X number of workers who are on ?20 - ?30 grand each, just cut the salaries and bonuses of the huge number of high up executives who on on very big six and seven figure salaries. It's not going to change their lifestyle at all and the rank and file keep their jobs.

It is laughable what is considered "bad" when the economy goes through a rough patch. I was reading an article a few weeks ago that was going on and on about how scary it was that profits at one of the big banks had dropped from 7 billion to 5 billion. Yeah, it's a big drop in percentage terms, but come on! They still made 5 billion clear profit!

Oh and on subject, I doubt it'll come to anything. I can see Sony possibly downsizing a division but I doubt they'd pull out of an entire market sector in one fell swoop.

[saif]

Sony are, afaik, quadruple gold stock in Japan in terms of reputation and culturaal value, they would not be allowed to fail.

[vertigo]

Sony are, afaik, quadruple gold stock in Japan in terms of reputation and culturaal value, they would not be allowed to fail.

You mean like Lehman Brothers and Merrill Lynch?
No one is invincible.

[Guts]

Sony are, afaik, quadruple gold stock in Japan in terms of reputation and culturaal value, they would not be allowed to fail.

Capitalism doesn't care for cultural values. It cares about profits the shareholders get.

"Doom. Wii wins. End of gaming.

This time next year, the only contender for GOTY will be Bratz: Ponyz All Upz In Ya Face."

Nah. It'll be a fight between MadWorld and No More Heroes 2.

[CMcK]

I honestly won't be surprised if Sony folds the PlayStation division. The PS3 isn't making money and is highly unlikely to replicate the sales success of its predecessors. If Sony is banking on taking a loss now and recovering the money I think they must realise by now that it ain't that kind of party this generation.
I think even the PS3 being used as a way to get Blu-ray into homes won't save it. Surely it's better for Sony to sell you a profit making disc player than a loss leader console?

[Neon Ignition]

I can't see Sony backing out of the Playstation brand either. Without another revenue source that can carry them strongly they will simply change how they manage the one's they've got. I wouldn't be suprised to see the return of the 20GB PS3 next year, reintroduced as a budget model at under ?200. They need to get seriously competitive. Though, hopefully, we're a long way off another generation I can see MS being the one's who really struggle. With the oldest machine in about 2 years I wouldn't be suprised if they start making noise about the next Xbox and it's another expensive powerhouse machine. Next-Next Gen I expect Sony will be more reserved and tone it down a bit ala Wii.

[Brats]

It a disgrace that a company making the kind of money Microsoft does is considering such huge job cuts.
The credit crunch is just the excuse some companies needed to make cuts and increase shareholder value.

Firms are always trying to increase shareholder value, that's one of the facets of Capitalism. Even when they are doing well, companies still have to remain lean and slick to survive. No firm survives by being a charity. Those who are saying 'sod the shareholders' are unfortunately being naive - the shareholders own the company.

I know MS makes loads of money, but they are only able to make that money because investors spent billions on shares in the first place. Unfortunately you can't then say to the investor 'sorry, we know you put loads of money into the company, but we're not going to look after you, we're going to look after the workforce instead'. The shareholders would simply sack the board and install someone else.

On the actual article at Fudzilla, it appears that MSN will be for the chop:

"we're hearing that MSN might be carrying the brunt of the layoffs. ....It's unlikely that Microsoft will be laying off a lot of people in departments and regions that are doing well, and considering the recent upturn in console sales, we have a feeling that at least most of the people working in the Xbox 360 departments will be pretty safe."

MSN has been losing money for years and unlike the XBox division hasn't been able to turn it around. You can only carry a poorly performing division for so long. It's not fair on everyone else for a poorly performing division to be dragging the company down. I would expect well paid executives along with basic workers to go.

Plus with a firm like MS, many shareholders will be pension funds. How fair is it if millions of hard working people are told that their pension will be less than they had hoped because MS decided to keep on employing people in a division that kept on losing money?

[Guts]

Firms are always trying to increase shareholder value, that's one of the facets of Capitalism. Even when they are doing well, companies still have to remain lean and slick to survive. No firm survives by being a charity. Those who are saying 'sod the shareholders' are unfortunately being naive - the shareholders own the company.

They might own the company technically but the workers make the money. Without the working man, the leeching shareholders wouldn't get jack. I find it pretty unfair that companies, which make billions of profits give the boot as thanks to their employees who have made them rich in the first place by busting their asses in factories for decades.

But hey, that's just capitalism, I know that's how it works. That doesn't mean I have to like it.

[Dirty Sanchez]

Many of those that lose their 'jobs' are contractors. Workers specifically employed to fill variable demand.

[charlesr]

It's the shareholders that gave the employees the jobs in the first place by providing massive cash injection on release of shares. The shareholders take the risk that the company will be worth it.

It still sucks though.

Best not to work for a public company if this is a worry. There are plenty of cash rich private companies out there that don't need to constantly think about the short term to please shareholders and thus don't need to lay anyone off until they actually start losing money (rather than when they don't exceed the previous year's revenue/pofit).

Back to Sony though, it's a worrying time. Also, without the PS3, where would the incentive for MS be to make a more reliable box?

[charlesr]

I wouldn't be suprised to see the return of the 20GB PS3 next year, reintroduced as a budget model at under ?200. They need to get seriously competitive.

It can't be that simple though. The difference in price between a 20GB and a 60/80GB drive now must be about ?2. Savings must come from elsewhere.

[CMcK]

I Though, hopefully, we're a long way off another generation I can see MS being the one's who really struggle. With the oldest machine in about 2 years I wouldn't be suprised if they start making noise about the next Xbox and it's another expensive powerhouse machine. Next-Next Gen I expect Sony will be more reserved and tone it down a bit ala Wii.

I think MS and Sony will be looking at next gen development from a different angle now. The Wii is underpowered and overpriced and is killing them both. Seems like a lot of consumers don't care about whizz bang graphics and floating point power.
Both MS and Sony would love to sell a console that makes profit from day one.

[Dirty Sanchez]

I think MS and Sony will be looking at next gen development from a different angle now. The Wii is underpowered and overpriced and is killing them both. Seems like a lot of consumers don't care about whizz bang graphics and floating point power.
Both MS and Sony would love to sell a console that makes profit from day one.

Solution could be for Sony to sell the brand to MS, everyone wins