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Sony Makes Layoffs, Cites PS3

7 Jun, 2007 By: Chris Tribbey

As many as 100 employees in Sony Corp.'s U.S. gaming division were laid off June 6 and 7, The Associated Press reported today. The job cuts took place at the Foster City-based Sony Computer Entertainment Inc. division, the Silicon Valley/San Jose Business Journal reported.

No job cuts were expected in Sony's Japan offices, according to the AP report.

“In an effort to accurately align the company to meet the changing needs of our consumers and of our industry, Sony Computer Entertainment America has found it necessary to analyze our current business and to restructure the company as necessary to continue our standing as a market leader,” SCEA spokesman Dave Karraker told the gaming Web site Kotaku in a statement.

“These restructuring efforts are currently underway and do include the streamlining of our operations and other initiatives to further strengthen the business, reduce costs and increase operational efficiency,” Karraker said.

The cuts come just weeks after Sony Corp.'s earnings report for the fiscal year, (ending March 31) showed a nearly $2 billion loss in the company's gaming division. The earnings report, released May 16, attributed the losses to “the sale of (PlayStation 3) at strategic price points lower than its production costs during the introductory period, as well as the recording of other charges in association with preparation for the launch of the PS3 platform.”

The PS3 launched in November and competes with Microsoft Corp.'s Xbox 360 and Nintendo Co.'s Wii gaming systems.

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