Posted tagged ‘US Economy’

Sony Eliminates 8,000 Jobs

December 9, 2008

Sony has announced that the company will eliminate 8,000 jobs and rein in planned investment as it reacts to the global economic slowdown.

From CRN:

Sony said Tuesday it would cut 8,000 jobs in reaction to sluggish sales, particularly of its televisions and digital cameras. That number comprises regular workers and represents 4 percent of Sony’s entire workforce. Sony also said it plans to reduce head count in its seasonal and temporary workforces. The move is aimed at slashing $1.1 billion in operational and investment costs. Sony’s investment in the electronics business will decrease by approximately 30 percent in the fiscal year ending March 31, 2010. That includes plans to cut investment expenditures this fiscal year by outsourcing part of the company’s proposed increase in the manufacturing of CMOS image sensors for use in mobile phones to third parties.

According to Sony, certain short-term measures have already been taken, including adjusting production, lowering inventory levels and reducing operational expenses. But the appreciation of the yen means that the Japanese manufacturer will need to adjust product pricing, downsize and realign domestic and overseas manufacturing sites, reallocate its workforce and reduce head count.

Sony’s moves will have global impact. For example, the company is postponing plans to invest in production expansion at the Nitra plant in Slovakia, which assembles LCD televisions for the European market. Further, the manufacturer plans to close two overseas manufacturing sites, including the Sony Dax Technology Center in France, which manufactures tape and other recording media. Overall, the total number of manufacturing sites will be reduced by roughly 10 percent, from the current total of 57, by March 31, 2010.

From the New York Times:

Sony, which had already announced scattered cost-savings measures, blamed the rapid deterioration in the global economic outlook and the strength of the Japanese currency for the cuts.

“These initiatives are in response to the sudden and rapid changes in the global economic environment,” Sony, which has 160,000 employees, said in a statement. Sony aims save more than 100 billion yen, or $1.1 billion, a year through the measures, which also include shutting several plants.

About 10 percent of the company’s 57 plants will be shut, including 2 overseas sites, and plans to expand a site in Slovakia where LCD televisions for the European market are assembled have been delayed. The statement did specify which plants will be closed.

Sony will also trim spending in semiconductors and will outsource a part of the production it had planned for image sensors for cellphones.

“Based on such measures, Sony is planning to reduce investment in the electronics business by approximately 30 percent” in the fiscal year ending March 2010, the company said.

The announcements highlight the extent of the pain many Asian exporters — especially in Japan — are facing as the global financial crisis deepens. Like other Japanese manufacturers, Sony has suffered from slowing consumer demand, aggravated by the yen’s rally against the dollar and the euro in recent months, which makes Japanese goods more expensive for consumers in the United States and Europe.

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In This Economy: Think Before You Buy

November 20, 2008

Many Americans have become flummoxed in these budget-conscious times by the attempt to determine time- versus cost-savings while shopping, as well as what discounted items are truly necessities. One expert says Americans are making “diagnostic errors.” “They’re stressed out, and using the wrong information to make a decision, and ignoring all other data that contradicts that decision,” he said. In these tough times, it just makes sense to save more money than we have in the past.

From the New York Times:

All around the country, at similar cosmic moments, perfectly sound brains have been seizing up like an old car on a frigid day, particularly in the last few weeks. As Americans attempt to perform cost-benefit analyses of their needs and behaviors, they are whittling pennies from cable bills only to squander dollars on gas driving miles to discount stores, or on coupon-spurred splurges for nonessential items, like Cheez Whiz or organizing supplies. Pinched by shriveled retirement and college accounts, battered by ballooning mortgage costs, rent and co-op maintenance increases, and hedging against the possibility that a job might vanish, some are practicing economies that may not deserve the name.

When Best Buy announced its latest sales figures last month, the company reported “an unprecedented drop in consumer buying of items like flat-screen televisions,” said Ori Brafman, a business expert and an author, with his brother, Rom, of “Sway: The Irresistible Pull of Irrational Behavior,” out since June from Doubleday Business. “But when Wal-Mart released its report last week, there was a surprise. Consumers had increased their flat-screen purchases. Somehow, because Wal-Mart feels like a bargain store, shoppers who have deprived themselves of luxury items elsewhere rationalized their purchases at Wal-Mart as ‘getting a good deal,’ ” Mr. Brafman continued. “Granted, flat-panel TV’s at Wal-Mart might run a little cheaper than elsewhere, but no financial adviser would include one on his or her list of Items to Buy During Tough Times.”

Americans may be forgoing Starbucks and stocking up on Spam, but they are also making severe “diagnostic errors,” Mr. Brafman said. “They’re stressed out, and using the wrong information” — such as the belief that buying at Wal-Mart equals saving money — “to make a decision, and ignoring all other data that contradicts that decision.”

Kathy Peel, a Dallas-based family manager (that is, a life coach whose niche is training families to run their homes like businesses), said that incidences of feckless budgeting and bad math seem to be on the rise, at least judging from the reports of coaches trained in her system. Leslie McKee, a Peel-trained family manager in Pittsburgh, has noticed a pattern of “people signing up for discount stores that sell in bulk and over-purchasing ‘bargains’ that are so enormous they will not live long enough to use the item,” she said. “Then they call me and spend more money to help them organize it all into mini-malls inside their homes.”

“What’s happening I think is we are letting all our gremlins out,” said Carol Prisant, American editor of The World of Interiors magazine. “Some people will obsess about drops of detergent and others will want to buy in massive quantities. This is the moment when we all sort of mildly crack up.”

Ms. Prisant, an antiques expert who has written books on how to gauge the value of furniture and other decorative objects, nonetheless stumbled recently, with a budgeting choice that involved shunning the $12 quart of green tomato soup at Grace’s Market — once a weekly purchase — but forking out $500 for two extra-large doughnut-shaped and oyster-colored dog beds from Perfect Dog Beds, which match the color of her new apartment.

“O.K., the old ones were yucky,” Ms. Prisant said. “But they were also, um, brown.”

“Grocery wise, cable foolish” is how Richard Winkler, an executive producer at Curious Pictures, a television production company in Manhattan, describes his current habits. “You know, walking three blocks to save 10 cents on Triscuits,” Mr. Winkler said, while “my phone bill still has charges like $4.99 per month for technical stunts I can’t even pronounce, much less access. No wonder Verizon is doing well.” (Mr. Winkler, whose wife has been entering their expenses into a Quicken financial planning program, vows to look at the budget she’s created — soon, really — and start pruning the premium channels from his cable bill.)

Nearly 1.2 Million Jobs Lost in the United States in 2008

November 7, 2008

Such a large number! The government reported more bad news about the economy early today, saying employers cut nearly 240,000 jobs in October. This brings the year’s total job losses to almost 1.2 million.

From CNN:

According to the Labor Department’s monthly jobs report, the unemployment rate rose to 6.5% from 6.1% in September and higher than economists’ forecast of 6.3%. It was the highest unemployment rate since March 1994.

“There is so much bad in this report that it is hard to find any silver lining,” said Morgan Keegan analyst Kevin Giddis.

Economists surveyed by Briefing.com had forecast a loss of 200,000 jobs in the month. October’s monthly job loss total was less than September’s revised loss of 284,000. Payroll cuts in August were revised up to 127,000, which means more than half of this year’s job losses have occurred in the last three months.

September had the largest monthly job loss total since November 2001, the last month of the previous recession and just two months after the Sept. 11 terrorist attacks.

With 1,179,000 cuts, the economy has lost more than a million jobs in a year for the first time since 2001 – the last time the economy was in a recession. With most economic indicators signaling even more difficult times ahead, job losses will likely deepen and continue through at least the first half of 2009.

“It’s pretty clear that we’re in a recession,” said Robert Brusca, economist at FAO Economics. “There is reason for us to believe we’ll see a drumbeat of heavy job losses for a while, and there’s room for them to get even worse.”