Will Playstation suffer with Sony cutting 8,000 jobs?
Sony recently announced plans to cut 8,000 jobs in the Sony Electronics division. This job cut was decided amidst the financial crisis facing the globe today. Many gamers may be curious as to how this could potentially affect the video game division down the road.
Normally I wouldn’t talk about an industry that doesn’t pertain to the video game sector here. However, since Sony does play a huge role in the video game market, it is suffice to say news of job cuts could have some bearing on the Playstation division.
According to Bloomberg, Sony will be cutting 8,000 jobs in their Electronics division, which is by far the largest division at the company. This is no surprise since Sony is the second largest electronics company in the world, right after Samsung, which holds the number one position.
Despite doing fairly well in the flat-panel TV market the company is suffering due to the strength of the Yen. With the global slowdown and the strengthening of the Yen, profits generated overseas drop in value. Hence, the job cuts overseas to compensate for the loss.
The job cuts are only to the Sony Electronics division and do not affect Sony Computer Entertainment (Playstation division). However, the company has indicated that a close eye will be kept on the video game division by putting it under review in the coming years.
Considering that Sony owns over 21 video game development studios worldwide, with most of them located in the U.S. and Europe, the exchange rate has to be killing the company. Shane Kim head of Microsoft Game Studios, recently revealed that the company decided to shutdown a first party studio in a effort to find scalable business ventures in face of the economic crisis – will Sony follow suit?
It is very difficult to say, considering that Sony has been buying up studios with the latest acquisition of Evolution Studios last year. Despite the global economic downturn, I highly suspect that the company will leave the Sony Computer Entertainment division alone as it has in the past.
Sony has way too much invested in the development of the Cell processor and its internal development studios to siphon its gaming division. However, it looks as though that Sony Electronics division is unfairly receiving most of the brunt of this cost saving move.
Related Posts:
25 Responses to “Will Playstation suffer with Sony cutting 8,000 jobs?”
Leave a Reply:
You must be logged in to post a comment. Don't have an account? Register today!
December 10th, 2008
Going from trouncing the competition last generation to running dead last in this generation? Yeap, I am sure some heads are going to roll.
December 10th, 2008
I don’t know. Maybe if Sony was more profitable in either division it would not have to cut jobs, but the company did seem a bit too cocky in the last couple of years. Too bad they are continuing to burn bridges instead of build them, but maybe this will all change next year.
December 10th, 2008
well hare bare… i agree with that but give it time. its gonna have a 10 year life cycle when you’ll be on the “xbox expedition” or something like that.lmao
December 10th, 2008
heads already did roll for that! This is talking about the poor economy, and not fanboy fodder…..gasp.
This makes it look more and more unlikely that Sony will aquire Level 5. Kind of a bummer. That would have been a good pick up for RPG fans..
December 10th, 2008
It’s 16,000 redundancies in fact.
8,000 is just the first wave and 16,000 may not be the end of it.
Sony are in real trouble.
http://www.independent.co.uk/news/business/news/sony-to-cut-16000-jobs-and-shut-production-sites-1059469.html
December 10th, 2008
Playstation Home tomorrow! (sorry this is off topic) Im excited though! i’ll see some of you guys in there.
December 10th, 2008
Don’t hold your breath Bourne.
December 10th, 2008
According to other web sites – PS3 is still 300,000 units ahead of 360 in the PAL territories. And that’s the 360 with an 18 month head start. Looks like NA is the only place were 360 has more unit sales ??
December 11th, 2008
spidey – sony, nor anyone, has provided any proof. it was SONY’s rep who said he THINKS they are ahead… with no data… i wonder why..
back ot: this sucks for the sony employees. at xmas time too…. not cool sony…. not cool..
December 11th, 2008
Spideydog
It was SCEE president David Reeves that said that.
Like as if he is a credible unbiased and believable source.
Not.
December 11th, 2008
No. It will not. Xbots may try to spin it to, but the simple fact remains that the cuts are in an entirely separate division with in the company.
“The majority of the job losses will come from Sony’s electronics business, which is considered separate from Sony Computer Entertainment. A fall in demand for flat panel televisions will see plans to boost production reversed, with 10 percent of manufacturing sites to close.
An additional 8,000 temporary jobs will also be cut by March 2010, which are not officially considered part of Sony’s global work force.”…. Nice try kev.
December 11th, 2008
The Sony Game div only employs 2500 so obviously they are not going to all be going from there…..like as if anyone said different?
So Barnabe, are you telling us that the game div will see no redundancies…..and how would you know?
BTW the newspaper I linked to says –
“Sony will also wield the axe in its seasonal and temporary workforces, cutting a further 8,000.”
I guess seasonal workers or temp contract staff don’t count, huh?
You can try to soft-soap it if you like but are you trying to tell us this is positive news?
You might like to also consider this is just the first announcement in this recession
(although they also dumped 10,000 people’s jobs in 2005
http://news.bbc.co.uk/1/hi/business/4270302.stm ).
If this coming recession is as prolonged and as damaging as many of the serious analysts are saying then it is highly likely this will not be the last big redundancy announcement from Sony.
December 11th, 2008
Happyhockum,
Why would you count the 8,000 temps and seasonal employees, obviously they were going to be let go anyway.
December 11th, 2008
Seasonal staff are one thing but contract staff are quite another.
Lots of companies rely on contract staff, it is a sad reality of business today but it does not mean that at least some of them are important staff.
You can’t just write them all off as if they are inconsequential as some seem to want to do here.
December 12th, 2008
16,000 jobs 2 weeks before christmas. Man that’s ice cold!
December 12th, 2008
“spidey – sony, nor anyone, has provided any proof. it was SONY’s rep who said he THINKS they are ahead… with no data… i wonder why..
back ot: this sucks for the sony employees. at xmas time too…. not cool sony…. not cool..
Happyhockum:
December 11th, 2008
Spideydog
It was SCEE president David Reeves that said that.
Like as if he is a credible unbiased and believable source.
Not.”
Fellas I knew exactly where those comments came from, just throwing some of your “reputable data sources” back at yas. You guys quite freely like to give out stats gained from MS execs as fact, but are quick to point out if Sony execs are used in the same manner.
Thanks for helping prove my point though
December 12th, 2008
Spideydog
I think you’ll find the latest NPD numbers just backed up the sales claims the Microsoft guy made about them outselling the PS3 by 2:1.
It’s on this site here if you want a look –
http://gamer.blorge.com/2008/12/11/analysis-npd-numbers-reveal-ps3-xbox-360-and-wii-selling-well/
…..but feel free to let us all know when any independant numbers back up the Sony mouth-piece’s claim, huh?
December 12th, 2008
Hey Spidey, where in Aus are you anyway?
December 12th, 2008
Canberra Harry.
Happyhockum – so MS execs have never lied or “bent” the truth have they??. All companies are guilty of bending the truth. I for one, will never defend MS or Sony over that fact. MS have done more than their fair share of “bending the truth”.
PS – there is more to the story than just NA stats. There is a “rest of the world” you know ????
December 12th, 2008
Spideydog
You can make up whatever tale you like, the fact stands that they have been telling the truth here.
Just as in that “rest of the world” the PS3 has been getting a serious beating.
You can close your eyes, stick your fingers in your ears and shout “la la la la….etc etc” all you like but the truth is out there.
The PS3 is taking a massive battering right now and isn’t out-selling XBox 360 anywhere except Japan.
….and even there it was losing out for a run of about 3 months IIRC recently.
December 12th, 2008
HappyHockum,
Funny how you turn one month into three. Who has their fingers in their ears again?
Not to mention you have no reliable source that says the 360 is outselling the PS3 in Europe.
-Arvis
December 12th, 2008
Exactly Arvis.
December 12th, 2008
Arvis, if I’m mistaken then fair enough.
I might be recollecting news of the XBox having several weeks ahead and not months
(I know it won out in all of Sept and continued into Oct).
…….and we all know ANY XBox win in Japan is a deep embarrassment to Sony.
There’s no shortage of info that the XBox is trouncing the PS3 in Europe either.
Sony claim to be 300k ahead in Europe.
But have you seen how they qualify that?
Look at how they phrase it and you can see they are as untrustworthy as a source can be, as usual.
“The statement was based on the fact that cumulative sales of PS3 in Europe since its launch now exceed the cumulative sales of Xbox 360 in Europe since their launch, despite Xbox 360 having had a 16 month lead on PS3.
Europe means the whole of Western Europe, Eastern Europe, the Middle East, Africa and Russia.
SCEE sources its market data from official sources such as ChartTrack and Gfk, from their retailers and from a variety of additional sources. SCEE has been using the same methodology for the last 10 years or so.”
http://www.gamedaily.com/articles/news/ps3-vs-xbox-360-whos-really-winning-europe/?biz=1
In otherwords they are putting as best a ’spin’ on things as they can.
Like all politicians they present their side in the best light possible, evwen if in this case it shows them up for the lying twisting ****s they are.
They are not comparing the XBox 360’s current excellent sales numbers to those of the PS3 sales now.
No.
They are comparing where they think the XBox 360 was at the same point from it’s launch to where the PS3 is at the same number of months in.
Typical lying politicians.
…..and it’s not just the tales they tell, it’s who they tell them to.
David Reeves made his comments at some fluff ‘Sony’s PlayStation Day’ event in London.
In contrast
Microsoft told Bloomberg
(only one of the most respected financial news services).
In other words they are telling investors and potential investors what is happening.
They were not guessing trends and they were not forecasting what they imagined might happen, no, they were indicating present hard reality.
They were talking to the sort of serious business people who will quickly find out if they have been lied to or strung along
(especially in todays economic climate).
“The company has now announced that based on Chart Track figures from September 29, sales of the Xbox 360 in Europe over the previous two weeks increased by 214 percent. Microsoft also said that the figures showed it was outselling Sony’s PlayStation 3 by two-to-one, but did not indicate how many units were actually sold.”
http://uk.gamespot.com/news/6198345.html?sid=6198345&part=rss&subj=6198345
I know who I would believe.
Microsoft quoting ‘Chart Track’ figures or a Sony spin-doctor?
Think Sony, think liars lying, no, in fact think criminal liars lying (root kits anyone?)
We’ll all know soon enough when this quarters numbers come out after X-Mas.
December 12th, 2008
Happyhockum, you are going overboard trying to prove something that everyone here already knows …. Nobody is saying that the Sony execs on this occassion are telling the truth. I think you will find most people here don’t believe a word that comes from any of the execs mouths FROM ANY OF THE COMPANIES.
You seem to be trying to paint the ms execs as being wonderful truthful beings. m8 this would have to be one of the only times they have told the truth and that would be ONLY because the evidence is convincing and they don’t need to spin it.
ALL the different companies execs are as bad as each other, it’d just this time, ms didn’t need to spin.
December 13th, 2008
Spideydog
Seriously, I’m not.
But I do know the difference between info given out by some exec at a ‘fluff’ event to cheer up the fans and info given out on a serious business channel for investors.
If a Microsoft guy had made the same sort of comment at an XBox ‘fluff’ event then I’d have been as equally dismissive as I am with those Sony comments.
I don’t even blame them for presenting their case in the best light possible, it’s just a more heavy version of what we all do.
But just like with our politicians even though it’s kind of expected I do get annoyed & concerned when it’s so contorted & nebulous and so obviously straight BS.