Sony Confirms and Accelerates Cost-Cutting Measures

It's becoming more and more certain that the worldwide financial recession is affecting the large corporations that are involved in the gaming industry. After seeing Microsoft and Electronic Arts decide to cut a lot of jobs and employ drastic money-saving measures, it seems that Sony will continue its plan to streamline production and development and will accelerate all the previously-announced measures to cut jobs and close down electronic and manufacturing plants.

The statement, made by Sony yesterday after unveiling its poor financial results in the last fiscal year, claims that new measures will be made, even though they might include some big decisions from executives to force employees into retirement or to fire them altogether. These are the three areas that the Japanese electronics company will focus on, as revealed at its press conference.

• Structurally reform Sony’s core electronics operations to better compete with its best in class peers in terms of speed to market and profitability. 

• Continue margin improvement activities to lessen the impact of the weak economic profile of key markets. 

• Accelerate the integration between products and network services by leveraging the combined strengths of Sony’s electronics and computer entertainment operations.

Furthermore, it seems that a drastic “headcount reduction” will be made in the entertainment and game divisions, which will see a lot of people be laid off and less money directed for development. “Sony intends to accelerate these actions, and in addition, implement further initiatives which are being announced today. Through these measures, together with anticipated restructuring to be achieved within the game, music and pictures businesses, and significant cost reductions in advertising expenditures, general expenses, logistics and other expenses, Sony now anticipates that it will achieve group-wide cost reductions of 250 billion yen.”

While this doesn't mean that the PlayStation brand won't be backed up by the large corporation in the future, it does make the possibility of a price cut less likely as a profit needs to be ensured even after Sony has broken even with the PlayStation 3.