Sony Announces Major US Job Cuts, Store Closures

Sony has announced major job cuts in its US operations as the company looks to refocus its strategies towards mobile devices.

The Xperia smartphone and tablet manufacturer released a statement saying that in order to maintain “competitiveness in an evolving consumer electronics market”, it was implementing an ‘organisation restructure’, which will see the company shed a thousand employees and close 20 of its 31 US stores by the end of 2014.

The cuts come as the company ‘further streamlines costs and continues to focus on existing partner relations’ to refocus away from computing and towards smartphones, tablets and games consoles. The eleven surviving Sony stores include five in California, three in New York, two in Florida and one in Texas.

‘Necessary’ move

“While these moves were extremely tough, they were absolutely necessary to position us in the best possible place for future growth,” said Mike Fasulo, President and COO of Sony Electronics. “I am entirely confident in our ability to turn the business around, in achieving our preferred future, and continue building on our flawless commitment to customer loyalty through the complete entertainment experience only Sony can offer.”

The news fits with the company’s earnings announcement earlier this month, which said it needed to cut 5,000 employees (3 percent of its entire workforce) globally by the end of the year. Sony had already closed six US stores in the first two months of the year prior to today’s announcement.

It also announced a major restructuring plans for its electronics business, including the spin-off of its loss-making Bravia TV division into a separate unit, and the sale of the Vaio computing brand to Japanese investment fund Japan Industrial Partners.

The company had a strong showing at Mobile World Congress as it tries to compete with Apple and Samsung in the mobile device market. It revealed a new flagship smartphone, the Xperia Z2, which featured the ability to shoot and record 4K video, alongside the high-level 10.1 inch Xperia Z2 tablet and a range of mid-range Xperia M2 smartphones. It also revealed the Sony SmartBand SWR10, a wristband capable of alerting users to smartphone notifications and tracking a person’s movements and activities through the Lifelog application.

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