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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.
Sony said it has abolished the company system that Stringer said was preventing different business units from communicating freely...
Sony is going Open Source???
Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. --Nietzsche
That Sony electronics will have greater control over their products?
My understanding may be flawed, but it seemed that the Electronics division was having problems with the Entertainment division sticking their nose in and making life difficult. Instead of having an MP3 player, they had ATRAC players that would convert your MP3's for you. It was only after the first release tanked they brought out a new line that would natively play MP3, ATRAC, and (I think) AAC.
If the Electronic division is allowed to flourish and tell Entertainment to mind its own business, they will probably stand a greater chance to make products that people want, instead of want the Entertainment division wants to control.
Of course, this is all just my opinion - I could be wrong.
52 Weeks, 52 Religions with John Hummel
The recording side of Sony had no trouble communicating to the MP3 player side the fact that they should do what they can to restrict users from copying songs freely. Stupid things like forcing users to convert from MP3 to ARTAC and limiting them from copying a song more than 3 times (which was easy enough to circumvent) still leaves me with a bad taste in my mouth 5 years since I received a Sony "MP3" player for Christmas that at the time was worth $300.
This is what happens when one half of your company is fighting with (and suing) the other half: either decide to sell music and movies, decide to sell mp3 and DVD burners, or find something other than an arms race to struggle to create/defeat unbreakable protection schemes.
If the g'vt kept the data on you that google does you'd better believe you'd be calling it "doing evil"
Yeah, I remember when I stopped buying Sony products. Probably about 6 years ago today. My guess is that is probably when their troubles started.
.. not the rule).
Sony has this nack for being extremely hard-headed. They stuck to their Beta machines, and missed the entire VCR explosion; they stuck to minidisc and DPMS (copy prevention tech) and refused to even license the technology for the longest time. Copying from minidisc has always been severely hobbled.
Sony Trinitron was the $hit for many years. Except when they got ridicously over priced.
Then Sony missed the whole MP3 bandwagon, instead pushing their ATRAC DPMS enabled system -- which nobody wanted (sounds like Beta all over again).
Memory Stick -- another locked down format from Sony.
Turns out Copy protection schemes just don't sell very well (exception: IPod
m
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.
Call it the iPod effect - Sony's stockholders were not too pleased to see the people who brought you the Walkman get smacked around by the fucking iPod.
My group found that Sony's division conflicts were ruining Sony's strategic opportunities. A simple example is Sony's music division prohibiting Sony's electronics divsion from building DRM-free MP3 players.
A more complex example is Sony's movie division failing to work with with Sony's games division-- thus we get the PSP that can play movies, but there's no Sony "iMovies" store ready. What a strategic goof!
Our strategic management recommendation was for Sony to bring in new leadership, specifically someone to rock the boat and get the divisions working together.
Sony made it as a television manufacturing company. They never completely understood other businesses. Their shotgun approach at trying other products occasionaly got lucky and often were complete failures alienating some customers. I've been burned so many times by Sony gizmo failures that I gave up on them.
Sony has forgotten about the rigourous quaility control and innovation that made them a manufacturing giant. Like many big technology companies, they have been taken over by marketeers and accountants.
The visionless have replaced the visionaries and Sony remains a cautionary tail for companies and nations that abondon mercantilist precsion for globalist rhetoric.
Of course, laying off staff won't actually increase sales. Decrease costs? Yes.
which is bound to make them a large amount of revenueRevenue and profit are very different beasts, too.
Believe me...I know these things. After all, I used to work for JDS Uniphase.
No, it's just Sony trying to maximize profits in order to please the shareholders. Biggest source of expense in a company is usually payroll.
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Never underestimate the power of stupid people in large groups.
Sony has been on a downward slide for quite some time. If they could just get over their "not invented here" mentality and not try to reinvent the wheel every time a new technology comes along. There is nothing wrong with taking something good and simply making it better and more compelling. If Sony made cars it would have square wheels and they would convince you that it was much better that way since you didn't need brakes anymore which by the way were also not invented at Sony.
For example, Sony used to have something like five different divisions which developed and marketed video cameras. This kind of effect is going to arise sooner or later in any large organization, but a bit of refactoring and consolidation now and then has to be a good thing.
Parity: What to do when the weekend comes.
wtf man?
how would saying "WERE FUCKED!!!!" save those jobs ?? instead of going bankrupt they reorganize like they fucking should, at least then not all of their employees end up unemployed.
(oh and parts of this whole thing would be to prevent overlapping, like pda/computers vs. psp)
world was created 5 seconds before this post as it is.
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.
/.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 can't see how any
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.
The thing is Sony gets a lot of support in Japan for these formats. It's like Americans buying American cars. They're probably more than a little blinded by the success at home and need a central power structure who can look outward and realize the future lies in open standards for the whole world, packaged in the nicest possible way. They can take a lesson from Apple.
a major overhaul of management in June
Should be read as "bonuses for management, layoffs for everyone else".
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.
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Klactovedestene!
Five years ago, just about everything electronic I had was Sony. Nothing I've bought for the past five years has been Sony. Somewhere along the line they droped the ball, product-wise. CD players, DVD players, TVs, telephones, clock radios, etc., etc., they just slipped back in bang-for-the-buck, mostly to Korean companies. Sony just can't seem to make the price-point without cutting quality.
Socialism: a lie told by totalitarians and believed by fools.
VCR, DVD player, phones, stereos, car disc players, Walkmen, MP3 players. That's a lot of money to be had.
Yes there's a lot of money to be had, it's just not being had by Sony anymore for the above products. They have too many competitors making decent products for less support more formats.
Time is what keeps everything from happening all at once.
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?
accoriding to paul graham, big companies can't do product development.
Also lets not forget that Sony is the head of *both* of Slashdotters' favorite two orgainaizations: the RIAA and the MPAA.
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.
Ever since I invested heavily in MD equipment first introduced by SONY, willingly paying the bleeding edge tax for what I thought was cool technology, and ever since Sony kept a white-knuckled grip on the control and licensing of that technology, effectively keeping the price sky high, and effectively killing it as a potential great medium, and effectively rendering my speculative investment worthless, I've avoided them like the plague.
Sony is very close to being the Microsoft of the electronics industry, except they haven't managed to garner the same dominant position (percentage-wise) in the electronics market as Microsoft has in the OS/software market. But, they keep trying with heavy-handed business practices, sky high (artificially) pricing, and proprietary non-interoperable (think memory sticks, "mp3" (heh) players, etc.) gadgets.
Maybe this shakeup can bring a change in attitude, a change in latitude, to their approach. I doubt it. But I can hope.
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 to some kind of servers to activate otherwise they "punish" you, as well as having self-destruct codes.
They just can't admit that their PSP was a failure and that Blu-Ray (aka BetamaxDisc) and the PlayStation3 are going to bankrupt them.
/rant
Wow, that's either an exaggeration or amazingly naive. If you honestly believe that the PSP, Blu-Ray and the PS3 are going to bankrupt a company with 151,000 employees and about a gajillion patents, a company that rakes in about $70billion a year in revenue, then you seriously need to stop smoking the reefer and pay attention in summer school.
Companies of Sony's size don't 'break' over one generation of marketing mistakes. The problem is much larger than a couple of wrong turns with products. Such a thing is achieved through the "head against a brick wall" method. Be stubborn enough to keep making the same mistakes and eventually they'll go broke.
If Sony ever goes bankrupt, it'll be because five or ten years from now, they're still climbing over each other, fisting big sweaty handfuls of dollars up the asses of their lawyers trying to revive the dead horse carcass they call a music business model that's been lying on the sidewalk for the past six years. If they'd spent a quarter of what they've already spent on their RIAA/MPAA legal bills on a decent online business infrastructure, they'd be raking in more money than iTunes.
Imagine that; 1999 and Sony releases SonySongStore.com - any songs by any Sony recording artist for $1, any album for $12 - they'd have forced Universal, EMI and Warner to all open their own websites to give their own artists a piece of the online pie. Then they wouldn't have to care so much about trying to force what *they* think is popular music onto the public. Instead, they could promote three times as many new artists for cents on the dollar using online advertising and, well you know, let the market sort the wheat from the chaff. No more need to sign huge, long term contracts with new, unknown artists, creating risky investments. Instead, sign them on so as they can provide their songs for download on your site, pay for minimal bandwidth costs if they go bust or end up raking it in because a shitload of people have downloaded their songs, realized they're actually talented and you've got yourselves a star.
Not to mention that if they'd done all of this six years ago, I guarantee you Sony would have brought out their own MP3 player years before Apple did and it would have become the benchmark. It would have essentially become the Walkman/Discman of the current generation. Instead, they're constantly trying to play catch-up, wondering why they can't keep up whilst simultaneously refusing to let go of the starting post.
Easier said than done, I know. But regardless my original point remains valid; If Sony ever goes bankrupt, it will be because they're still continuing with this DRM/RIAA/MPAA death spiral of a charade two or three CEOs from now. It's worse than they think because it's not just a error of judgement that's affecting their entertainment section; it's filtering across to their R&D department (taking a couple of years to finally release a decent MP3 player that, you know, actually plays MP3s), their marketing department ("Trust us when we say you'd rather have your songs in ATRAC format") and until someone towards the pointy end of the pyramid decides to say, "Uhh, hey guys I think we're on the wrong track here", they're going to continue to get screwed with their pants on.
Sorry heh,
Actually Sony Computer Entertainment consists of about 10% - 30% of Sony's overall sales.
Sony doesn't have a share in mobile phones? Do a little Google search for Sony Ericsson...
Actually, Matsushita is larger because of many, many reasons, the chief reason being that it was founded 28 years before Sony was.
;)
Although it wasn't one of the Big Four zaibatsus, it was also dissolved after the Allied occupation of Japan and targeted for systematic breakup, however was saved by worker/family union petitions and thus is a much, much more significant staple of the Japanese economic landscape.
You might be an IT professional and graduate student, but I'm also an IT professional, Wharton School graduate and majored in Japanese Business and Economics