Sony plans 20,000 job cuts in reorganization

Sony Corp. plans to cut 20,000 jobs, about 13 percent of its worldwide workforce, and push for greater convergence between its electronics, games and entertainment content over the next three years as part of a reorganization detailed by the company Tuesday.

The central goal of the plan is to increase the company's profit margin to at least 10 percent in fiscal year 2006, the period from April 2006 to March 2007, Chairman and Group Chief Executive Officer Nobuyuki Idei said at a Tokyo news conference. Sony's profit margin is currently around 4 percent.

The layoffs will be carried out over a three-year period and correspond to about 13 percent of the company's workforce, which stood at 154,500 at the end of March this year.

Approximately 7,000 of the jobs to be lost will be in Japan. In addition, the company plans to reduce by around 30 percent the number of facilities, such as factories, warehouses, distribution centers and service centers, it runs from the current total of around 200, said Kunitake Ando, president and group chief operating officer, at the same news conference.

During the conference Sony also announced that it had named Ken Kutaragi, president and chief executive officer of Sony Computer Entertainment Inc. and the man behind the PlayStation game consoles, to head a new internal division that will plough research and development money into developing semiconductors for electronics products.

A budget of