Sony Swings The Ax

Japanese electronics and entertainment giant Sony Corp. is trimming 20,000 jobs, or about 13 percent of its global work force, in the next three years as part of a turnaround strategy announced Tuesday.

Of those job cuts, 7,000 will be in Japan, the company said in a statement. Regional breakdowns were not immediately available. Sony employs about 154,500 people worldwide. Sony said it will integrate administrative and corporate jobs that overlap and increase efficiency.

The plans include bringing together engineers in the company's home and mobile electronics sectors, such as cell phones, mobile devices, TVs and video-game consoles, to beef up development of computer chips and devices, the Tokyo-based company said.

It also will develop a joint venture to strengthen purchase of liquid crystal display panels and develop next-generation TVs.

"We hope to be able to offer new businesses that take advantage of Sony's unique combination of electronics and entertainment," Sony Chief Executive Nobuyuki Idei told reporters at a Tokyo hotel.

Sony has been reviewing its strategy to boost its lagging profits. The emergence of cheaper rivals such as Samsung of South Korea and Dell Inc. of the United States have chipped away at Sony's success in audio equipment, computers, TVs and other gadgets.

Sony's glamorous image built over the decades through hits like the Walkman, which helped define a lifestyle of a generation, has not quite been matched by the Vaio personal computer or Wega TV. Trends in electronic goods now come and go more quickly, rapidly turning high-tech products into cheap commodities.

Sony has also fallen behind domestic rivals such as Sharp Corp. in liquid crystal display TVs, which are growing in popularity around the world, as well as Matsushita Electric Industrial Co., which makes the Panasonic brand, in DVD recorders.

Sony's profits tumbled 25 percent in the quarter from July through September to $304 million from a year ago. Sales edged up 0.4 percent to $17 billion - the first sales increase for the Tokyo-based company in three quarters.

Sony said extra research costs in its video game division and losses from movie box office flops offset strong sales of digital cameras and cell phones in that quarter. But for months, Sony has been promising a new strategy to turn around its core electronics operations.

On Monday, Sony announced a joint venture with Japan's top mobile carrier, NTT DoCoMo, to develop an integrated computer chip based on Sony's "smart card" technology that will allow cell phones to be used as train passes, electronic wallets and personal identification. But officials say the venture being set up in January will make money from licensing fees and is not expected to generate profits for the first few years.