Rumors: Sony to Cut Several Divisions

| 5 Jan 2009 11:11

The world-wide recession, a stronger yen, and flagging PS3 sales may be taking their toll on Sony, as the electronics giant is rumored to be shutting down several divisions in a desperate cost-cutting measure.

According to Reuters, Sony will likely announce closures of factories and major divisions early next month, though the company itself has denied that any such plans existed. Whether or not the rumors are true, there might just be reason to believe that they aren't far off the mark: the global recession is hitting everybody's pockets, a stronger yen means that Sony's vast overseas operations don't pay the bills at home like they used to, and the PlayStation 3 is struggling to stay afloat.

If it is true, though, one wonders how it might affect the company's gaming division. With so much money invested in the PS3 already, it probably wouldn't be wise to just pack up and leave the market to Nintendo and Microsoft. On the other hand, if Sony is still losing money on every PS3 sold and a price drop might just make things worse ... would it be better to just cut its losses to try and staunch the bleeding?

Or would cutting other unprofitable divisions - we've heard rumors that TV production is on the chopping block - to focus on getting the PS3 back in the black be Sony's best chance? Stay tuned for any further developments as the story unfolds.

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