Sony Pencoed job loss fears over changes

Sony has a plant at Pencoed

Sony workers in Wales are braced for news about possible job losses after the firm said it was cutting 10,000 staff worldwide.

The electronics firm employs 300 people at its manufacturing plant in Pencoed, Bridgend.

The reduction includes staff working in businesses that are being sold, such as the firm's chemicals division.

A Sony UK spokesman said: "Sony Europe will respond to the challenges set by Tokyo in due course."

The chief executive of Sony Kazuo Hirai outlined the firm's turnaround plans on Thursday.

The company forecasts a record annual loss of $6.4bn, double its previous estimate.

<itemMeta>news/business-17686681</itemMeta>

The cuts, which represent 6% of the global workforce, will be made over the next 12 months.

Sony says it will focus its business on three areas - digital imaging, games consoles and mobile devices.

It hopes the changes will help to generate sales of $10.5bn by the financial year ending in March 2015, with a profit margin of 5%.

Sony has been struggling to compete in the television business with South Korea's Samsung and LG, while Apple has challenged it in audio gear and phones.

The firm's Pencoed site, currently on a planned two-week Easter shutdown, is both a manufacturing for export plant and a customer service centre for the repair of faulty products.

It specialises in manufacturing professional quality broadcast cameras.

The production of high-definition televisions is a recent addition to the plant which also produces digital circuit boards for the firm's Bravia LCD range of LCD TVs.

Fifty new jobs were created at the plant in 2010 after a £2m investment.

Dr Martin Rhisiart, of the University of Glamorgan's business school, said it was unclear what impact, if any, the job losses would have on the Pencoed plant.

"We're not sure yet because these details are still emerging," he said.

"What we do know is that their big TV production business, the TV manufacturing business, has sustained losses of $10bn over an eight-year period, and that's likely to be the main target for this restructuring package.

"We don't know yet what the impact will be for Pencoed.

"Pencoed is perhaps a little fortunate. It manufactures hi-tech broadcast and professional cameras, HD cameras, the type used by the broadcast industry.

'Thrive'

"We're hopeful that perhaps with 168,000 people employed worldwide by Sony, and only 400 or so at Pencoed, that they'll focus their attention on these big loss generating parts of the business rather than the niche specialist centre we have in Wales."

Dylan Jones Evans, professor of enterprise and innovation at the University of Wales, suggested the Japanese firm's Welsh plant was well placed to ride out the job losses announced.

He said: "Sony is a critical business in terms of advanced manufacturing in Wales, which is one of the key sectors identified by the Welsh government in driving the economy forward.

"It is recognised not only in Wales but also internationally that the management team at Pencoed and the products they are developing are of the highest quality.

"With the move to increased dependence on new products to drive forward companies such as Sony, it is hoped that the potential clearly exists at Sony in Pencoed to not only avoid job losses but to thrive in the future."

Union Unite said it expected to learn more about the Sony's plans next week.

There has been a Sony presence in the area since 1973 but in recent years it had seen a downturn in the fortunes.

TVs

In 2005, Sony closed its main factory at Bridgend with the loss of 650 jobs because of falling sales of traditional-style TVs.

A further 250 were lost at the Pencoed assembly plant at the same time.

In its heyday, the two sites employed more than 4,000 people, after Sony acquired the plant in 1973 and began production a year later.