Sony cuts may hit 4,500 jobs in Wales

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The Independent Online
THE INTERNET revolution has prompted Sony, the Japanese electronics giant, into a radical restructuring that will see it increase its focus on new consumer technologies for the digital generation.

The company is to cut 17,000 jobs worldwide and close 15 of its 70 factories. It is not yet known if the two UK factories, in Bridgend and Pencoed, Mid Glamorgan, which employ 4,500 people, will be affected.

With the Sony Playstation now accounting for almost half of Sony's profits, the company has hatched an ambitious plan to bring consumers a new range of digital products. The aim is to "create new lifestyles" and "provide new forms of enjoyment in the network-centric society of the 21st century".

Some City analysts expressed concern that Sony was moving away from its traditional business of making televisions, video recorders and hi-fi systems. But others welcomed the move as inevitable in a world where homes would soon be connected up to a single digital system for music,shopping and financial services.

Sony's 10 divisions will now be spread across just three, and it will spend $2.7bn (pounds 1.62bn) on taking electronic control of various subsidiaries. It will retain its huge music business, whose acts include the singers Mariah Carey and Lauryn Hill. Sony Films, previously called Columbia Studios, will also be a central part of the group.

It will invest heavily in the development of a new network platform to provide consumers with digital content in music, film and financial services. The restructuring comes as Sony battles its way through a recession that has forced electronics makers to cut prices to remain competitive. Rivals such as NEC, Toshiba and Hitachi have all been forced to make cuts as the economic crisis in Asia takes its toll.

Competition has been most fierce in the market for more basic products, such as televisions and video recorders. The new plan will help Sony to increase its focus on its more profitable products, such as the next generation of Playstation. The company has been engaged in a titanic "console battle" with its rivals Sega and Nintendo for first position in the video games market.

Sony declined to say where the 17,000 job cuts would be made. "The plan is to achieve the cuts through natural wastage," said a spokesman.The company could not rule out compulsory redundancies.

Sony employs 170,000 workers worldwide and plans to make the cuts by March 2003. It has not said how much the closures and lay-offs will cost.

The shake-up is a big step for Sony, founded by Akio Morita in post- war Tokyo. The company experienced a severe setback in the Seventies when it backed the technically superior Betamax video recorder system against the more widely available VHS rival. But the Sony Walkman was one of the most successful new technology launches of all time.