Sony to cut game workers in U.S.
On the heels of recording a $1.8-billion annual loss in its game division, Sony Corp. on Wednesday announced layoffs at its U.S. PlayStation operations.
Sony Computer Entertainment America would not disclose the number of workers affected. Company executives speaking on condition of anonymity said that as many as 50 people, or 3% of the 1,600 employees in its Foster City, Calif., office, would lose their jobs.
“In an effort to accurately align the company to meet the changing needs of our consumers and of our industry, Sony Computer Entertainment America has found it necessary to ... restructure the company,” spokesman David Karraker said.
Although Sony declined to specify what positions would be eliminated, Karraker said neither executives nor game developers would be affected. The company cut 160 jobs at its European PlayStation unit in April.
The cuts come as sales of the PlayStation 3 continue to lag behind those of Nintendo Co.’s Wii console. In the U.S., sales of the Wii outpaced PS3 sales by more than 4 to 1 in April, according to research firm NPD Group. In Japan, the ratio was 5 to 1, according to game magazine Enterbrain. Both consoles launched in November.
Sony plans to ship 11 million PS3s this fiscal year, ending next March. Nintendo has said it would ship 14 million Wii units, a figure many analysts expected to rise to meet heightened demand.
Analysts say Sony’s cost cutting doesn’t come as a surprise.
“This is a product of how the PS3 has performed thus far,” said Colin Sebastian, an analyst at Lazard Capital Markets. “When businesses run well, you can subsidize people. When it doesn’t go so well, it’s harder to justify a larger workforce.”
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