SONY CORPORATION said yesterday that it would cut 650 jobs at two manufacturing plants in South Wales because the demand for flat-screen televisions has hit sales badly in the UK and the rest of Europe.
In his first big decision since becoming Sony’s first non-Japanese head last week, Sir Howard Stringer, a Welshman, said that the company would close its Bridgend factory by next March with the loss of 400 jobs. The site makes cathode ray tubes (CRTs) for traditional-style televisions.
The company will also cut 250 positions at its plant near by in Pencoed, although the site will remain open and will concentrate on customer service, distribution and the production of digital cameras.
The job losses follow the 300 cuts announced at the South Wales plants in January and come a day after 173 job losses were announced at the Wrigley’s sweet factory in Bridgend.
Tony Blair described yesterday’s announcement as “tragic” and pledged to put together a support package to help those affected.
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The Prime Minister said: “The extremely loyal workforce at Sony have known for some time that the market for the older technology televisions was in rapid decline but they and I had hoped — following previous meetings with Sony — that the emerging markets in Eastern Europe would help sustain production in Wales for quite some time.”
Felicity Williams, general secretary of the Wales TUC, said: “This is more bad news for manufacturing in Wales and desperately disappointing for hundreds of loyal Sony workers and their families. Everything possible must now be done to provide hope and support to the workers involved.”
A spokesman for Sony said that the decision had been made “with regret” and despite “excellent performance” at the two plants.
He added: “The demand for CRT-based televisions within the UK and Europe has fallen significantly and the transition to flat TVs has been much quicker than we first expected.”
Sir Howard, who became Sony’s chairman and chief executive on Wednesday last week, is expected to follow yesterday’s cuts with the announcement of a new strategy in September. Analysts believe this could include the sale or closure of some divisions as the Japanese media giant seeks to reverse a lengthy profits slump.
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He plans to use Sony’s entertainment arm, which includes a Hollywood film studio and half of the SonyBMG music group, to drive sales at the electronics unit, which accounts for 60 per cent of group turnover.
Sir Howard, who has 30 years’ experience in American broadcast media, replaced Nobuyuki Idei, who presided over a decline in profits at the company in recent years which forced it into a £1.8 billion restructuring.
The Welshman, who was previously chairman and chief executive of Sony Corporation of America, was instrumental in transforming the group from its traditional base as a producer of consumer electronic goods into a diversified media conglomerate with a strong presence in the television, film, music and computer gaming industries.
A PICTURE OF DECLINE