Sony Layoffs - Sony Corp (NYSE: SNE)
Dec
9
Written by:
12/9/2008 11:59 AM
Sony is planning on cutting 8,000 jobs to reduce expenses by
$1.1 billion as the company struggles to stay profitable. They will also delay
spending on manufacturing and streamline their supply chain. Technology companies
in Asia are worried that others may have to
take similar steps as the worldwide slow down has reduced demand to high-definition
television sets, computers, and other small electronic devices.
Stock Movement
The stock of Sony (SNE) has recently begun to move higher
and is higher on the day 5% with the announced costs reductions. The holiday
season has traditionally been a period of profit for the company and could
surprise investors if store sales are stronger than expected. But longer term
the company needs to deal with reduced margins, falling demand, and improving
its return on investment which fell to 8.6% last quarter.
Other Companies in the Chain
Japan, Taiwan, and South Korea are seeing similar
issues in other areas of the supply chain for electronics. Memory chip makers
have taken steps to reduce costs including laying-off temporary workers. Full
time workers are less likely to be let go or they are let go quietly as social
traditions frown on large terminations.
The Trade
The chart for Sony Corp stock has made a nice bottom
formation which could inspire additional buying interest. In addition to the
cost reductions action taken; the holiday season is a catalyst for a rally, the
stock should move higher in the near term. But the fundamentals still look weak
with revenue and earnings not rising at this time.
2 comment(s) so far...
Re: Sony Layoffs - Sony Corp (NYSE: SNE)
Wow. That's a huge amount. If huge companies like Sony are getting affected by the whole financial situation, just imagine how the smaller companies are coping.
By soy candles on
12/10/2008 1:46 PM
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Re: Sony Layoffs - Sony Corp (NYSE: SNE)
This is a combined 16,000, with 8,000 being full-time and 8,000 being part-time or temporary.
By ForexTradingSystemCentral on
12/10/2008 2:29 PM
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