Sony to ax 10,000 jobs in turnaround bid: Nikkei - (via Reuters)

<http://www.reuters.com/article/2012/04/09/us-sony-job-cuts-idUSBRE83803Y20120409>

Sony to ax 10,000 jobs in turnaround bid: Nikkei


(Reuters) - Japan's Sony Corp is cutting 10,000 jobs, about 6 percent
of its global workforce, the Nikkei newspaper reported on Monday, as
new CEO Kazuo Hirai looks to steer the electronics and entertainment
giant back to profit after four years in the red.

The job cuts would be the latest downsizing in Japan Inc where
companies from cellphone maker NEC Corp to electronics firm Panasonic
Corp are trimming costs in the face of a strong yen and competition
from rivals like Apple and Samsung Electronics.

TV makers in particular have been hit hard by the tough business
climate as well as sharp price falls, with Sony, Panasonic and Sharp
expecting to have lost a combined $17 billion in the fiscal year just
ended.

Investors will closely monitor a briefing on Thursday by Hirai, who
formally took over this month as chief executive from Howard Stringer,
for further clues on how Sony plans to revamp its business.

<http://www.reuters.com/article/2012/04/09/us-sony-job-cuts-idUSBRE83803Y20120409>

 

Sounds like yet another CEO who is too stupid to know how to do anything but
lay people off.

You don't regain strength by cutting costs, you do it be increasing revenue.
But increasing revenue requires brains, whereas cutting costs does not.

What Sony really needs is to somehow bring back Mr. Morita from the grave.

 

Any businessman worth his salt conserves capital.

Short term shortfalls are one thing, but a company with long term
hemorrhaging is something else. The television business is brutal with
few (if any) manufacturers making a profit more than thin gruel.

 

both are important.

 

Any businessman wishing to survive builds capital.

 

Then why do CEOs depend so much on cost-cutting alone?

 

not all ceos are good at what they do.

 

But do they?

Regards,

Eric Stevens

 

From what I've seen, almost none of them are good at what they do.
Nevertheless, the bad ones are paid just as much as the good ones, and seem to
be no more likely to lose their jobs.

 

It's hard to find examples of CEOs using any other method.

 

Yes, I've got to admit, I don't know how they sell large TV's for the
prices they do. Compare a 55" LED/Plasma TV to a DSLR that costs the
same. Think of the difference in material costs, shipping, etc.

 

"I pay my workers high salaries so they can buy my cars."
-Henry Ford

 

That would be an investor, not a real businessman.

Which is why a smart business develops new products and markets. Sony once
was an innovator, (too long ago unfortunately) it seems they have now given
up.

Trevor.

 

Their innovation largely ceased after their visionary founder, Akio Morita,
died.

The same thing happened to Microsoft after Bill Gates left, and to Disney
after Walt died. And so on.

Many successful corporations become that way because they had a particularly
gifted founder or early CEO. Once that person is gone, the success goes with
it, albeit not always overnight.

 

Perhaps part of the reason for this is that a cartel got busted.

 

It's hard to find in part because it's harder to see. You can cut many
jobs in one day. It may take half a decade or longer, from inception to
full operation, to put new capital into play. Guess which one makes the
news.

 

In the case at hand, the bleed of existing capital needs to be stopped
as a high priority.

 

"It's a good thing for uneducated men to read from books of quotations."
- Churchill.

 

No. A real businessman uses capital (spends it) but recovers operating
expenses from cashflow in such a way that sunk and liquid capital over
time increases ... allowing development of new products, services,
markets, acquisitions, borrowing, ...

When cashflow goes negative quarter to quarter, capital erodes and
destroys the business. Sony has been in this mode for far too long.

They should have been king of MP3 in the Walkman tradition. Apple
scooped that market. And they weren't first (or even 3rd) to try.

In the TV and audio, S. Korea and China happened to them and they
attempted to cling to home manufacturing. The rise of the yen is an
additional burden on their margins.

Their marketing people are disconnected. Their engineering people are
extremely good - but perhaps they have far too much sway over features
and product orientation.

(I recall a product that would allow you to "drop" a vinyl record in it
(any conceivable orientation) and it would cleverly catch it, turn it
flat, align it with the spindle, drop it on and play it. What were they
thinking? That people needed to be careless with their vinyl?).

I see too many Sony products trying to embrace (forcibly sometimes) the
customer with "do all" solutions. Jack-of-all-trades, Master of none -
with entrapment to their standards. (hp is just as bad in a narrower
context).

 

MP3 postdates Mr. Morita.

Sony isn't the only company trying to do that.

I opened an HP computer not long ago to replace a disk. What I saw had nothing
in common with the way HP computers looked inside 20 years ago. It was
depressing. Of course, if HP still built its own computers and still built
them the way it used to, the disk never would have needed replacement.