Japanese Web site Mainichi Daily News has posted a story forecasting job cuts of up to 20,000 employees by Sony Corporation. The cuts are reportedly part of a reform policy designed to streamline operations through the 2005 fiscal year. According to Sony's estimates, the consumer electronics giant employed more than 160,000 people in 2003. Sony's official announcement of reform measures is expected on October 28. However, according to the Mainichi Daily News site, some of the job cuts will result from an "early retirement preferential treatment system" as well as the limitation of new hires.

　　Early this year, Sony warned of impending large-scale restructuring, saying that it would put some 300 billion yen (or approximately $2.7 billion) toward the project over the next three years. One of the major shifts in Sony business operations, according to reports, is the halt of domestic production of cathode ray tubes (CRTs), which are used in some Trinitron televisions and computer monitors. This measure is apparently designed to help bolster Sony's focus on the rising plasma and liquid crystal display (LCD) markets.

　　Currently, Sony maintains seven plants worldwide specializing in the manufacturing of CRTs. The two Japan-based plants are in Inazawa, Aichi Prefecture, and Mizunami, Gifu Prefecture. Next year, CRT production is reportedly scheduled to cease at these two sites so that the plants can be used for final television assembly and distribution operations. CRT production will continue at plants overseas; there are two such plants in the US and one each in China, Singapore, and the UK.

　　The reports did not address the question of whether Sony's games division, Sony Computer Entertainment Inc., and its worldwide subsidiaries would be affected. However, the games division is likely to be looked on favorably, since PlayStation- and PlayStation 2-related sales resulted in an estimated 60 percent of the ailing consumer electronic giant's operating profits of $1 billion in fiscal 2002. (Reported sales from all Sony businesses combined were $62.3 billion.)

　　In addition to the forthcoming PlayStation Portable, the games division has spurred initiatives in other Sony consumer electronics business, including the PSX next-generation game console. Further, SCEI's role in the development of the CELL processor, which is to be used in various consumer electronics devices, including the PlayStation 3, should figure largely into sales for Sony's fiscal year 2005. More on this story as it develops.