Sony Might Undergo Major Changes to Save Itself from Disaster

Nothing heralds in a new year like news of massive layoffs from one of the largest consumer electronics manufacturers, Sony. But that's not the biggest blow (unless you are one of those laid-off employees, in which case, you have our condolences). Sony is in such a dire predicament, they are planning to completely "restructure" the company and close several major divisions.



This news comes after an article in The Times indicated massive restructuring to accompany the layoffs that are likely to near the figure of 16,000 or so employees and contractors. There is no word on which specific divisions will be closed is expected to be unveiled at CES in Las Vegas this week.

But how did Sony end up so deep in the red?

Well, for starters, Sony has done little to parallel its development efforts with market trends, opting instead to pursue its tried-and-true consumer electronics manufacturing that tends to become even more vulnerable than other content and media related models in times of economic depression, stagnation and, worse, deflation. From a structural perspective, Sony has also fostered a bureaucratic culture in its Japanese, North American and European operations that has been unwilling to implement changes that could improve the company's viability.

Much of the strategy for returning to solvency and profitability revolves around a stronger emphasis on researching and developing software and, moreover, a structural organization which would concentrate more power in the hands of CEO Sir Howard Stringer, who hopes to streamline operations and level bureaucratic elements.

Though these comments and The Times article at large have still not been confirmed by Sony, the aforementioned layoffs do seem likely to fall mostly on Japanese operations.

Whether or not a redirection of research and development and restructuring will be enough to overtake competitors Apple and Nintendo is uncertain, but, in a time where even companies "too big to fail" are sinking, jettisoning furniture never hurts.

For more news about sinking companies and rising expectations in the tech industry, check out these other blog posts:

What to Expect at Macworld 2009

Cell Phone Companies Fixing Text Message Prices?

The Android Market Will Feature Paid Apps

Video Game Death Match 2008: PS3 is Whooped by 360 and Wii

Tech Trends to Expect in 2009