econ-Journal42 - company cut its net profit forecast by 38...

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Duc Hoang – ECON210 Journal Sony to close factories and cut 8,000 jobs By Robin Harding in Tokyo Published: December 9 2008 Sony will close five or six factories, curb investment and cut 8,000 jobs globally, it announced on Tuesday, in an attempt to stay profitable through the slump in consumer electronics spending. The 8,000 job losses are about 5 per cent of the 160,000 employees in Sony’s electronics division and a similar number of part-time workers will go as well. One of the plant closures will be in France, but Sony would not name the other sites to be affected. The company has been hurt by the weakness of the euro against the yen and said it would raise prices to compensate. Sony declined to say how much the restructuring would cost, prompting fears that the company would make a net loss in the current financial year. The
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Unformatted text preview: company cut its net profit forecast by 38 per cent to Y150bn at the end of October and conditions for electronics companies have deteriorated since then. Sonys decision to close factories and cut jobs, in some extent, might be an example of the company shut down case when the price is greater than the minimum average variable cost. As world economy is struggling with recession, consumer spending dramatically decreases. The market of more elastic products such as luxury Sony notebooks and desktops tends to be hit more seriously by the drop of consumer spending. In other words, these products demand certainly decreases as the consumer confidence falls. When demand falls below the minimum average variable cost, the firm will choose to shut down....
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This note was uploaded on 03/10/2011 for the course ECON 101 taught by Professor Duc during the Spring '05 term at Linfield.

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econ-Journal42 - company cut its net profit forecast by 38...

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