Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Sony Corp - Sony -- Ignore unavailable to you. Want to Upgrade?

To: Don Dorsey who wrote (25)	3/8/1999 10:40:00 PM
From: Neil H	Respond to of 497

Dan Bought in early yesterday. Think this is a winner going forward. Monday March 8 10:20 PM ET Sony Unveils Job Cuts In Major Overhaul By Andrew Morse TOKYO (Reuters) - Japan's Sony Corp (NYSE:SNE - news), maker of the Walkman personal stereo and the PlayStation game player, unveiled a sweeping restructuring Tuesday that will trim its work force by 10 percent and consolidate its industrial empire. In a bid to boost its sagging profitability, Sony will cut 17,000 jobs globally by the end of March 2003 and slim its sprawling global network of 70 manufacturing companies to 55. The restructuring comes as Japan slogs through a recession that has forced electronics makers to slash prices to remain competitive. The move also pushes forward Sony's vision of a fully networked era in which home electronics components can communicate with one another, allowing consumers to use one digital system for music, movies and financial services. ''This restructuring ushers in the second stage of Sony's growth by pushing network-related businesses,'' co-chief executive officer Nobuyuki Idei told a news conference. The restructuring will transform three affiliated companies -- Sony Music Entertainment (Japan), Sony Chemicals Corp and Sony Precision Technology -- into wholly owned subsidiaries as of January 1, 2000. Sony is also positioning three in-house electronics companies -- Home Network Co, Personal IT Network Co, and Core Technology & Network Co -- as well as affiliate Sony Computer Entertainment, at the core of its electronics business. Idei will become a director of Sony Computer Entertainment, which makes the popular PlayStations and is now owned jointly by Sony Corp and Sony Music Entertainment. While industry watchers had expected Sony to overhaul its corporate structure, currently divided into 10 groups, the news took stock traders by surprise. ''It's very clever,'' said Coen Kluyver, head of institutional sales at ING Baring Securities. ''They've unlocked shareholder value and kept their group together.'' Sony shares surged on the Tokyo Stock Exchange, rising 730 yen or 7.26 percent to 10,780 by the close of the morning session. Shares of the three affiliates, all of which are listed, also met feverish demand when trade was resumed after a temporary suspension by the exchange. Despite the euphoria, some cautioned that Sony has moved away from its traditional role as a maker of diversified electronics products and become too dependent on the PlayStation, which accounts for 46 percent of its consolidated profits, according to the Daiwa Institute of Research. Sony's reliance on the PlayStation is expected to rise to 51 percent of profits next year when it releases its second generation of the popular game player. Some also warned that the costs of the restructuring, particularly the layoffs, may weigh on Sony's profitability in the future. ''You're looking at 17,000 people,'' said a trader at one of Japan's major securities firms. ''There's a lot of cost associated with a restructuring of that size.'' Neil