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Just when Sony opens a un fastueux store, SonyStyle, at 39 avenue George V, the Japanese giant must react to shield itself from the effects of the crisis. For this reason, Sony will eliminate 16 000 jobs, which represents 5% of its global staff. These job cuts will occur throughout the world, and would allow Sony to save 800 million Euros per year.
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Sony is quite successful, but not necessarily profitable. Indeed, Sony is operating on markets with a low margin and huge development costs – 3 of Sony’s products illustrate this fact. The first is the market of flat-screen TVs, market on which the price war led by the competitors over the last 2 years, has made all the flat-screen manufacturers lose money on every TV they sell. Everyone knows how important Sony is on this market, with its famous Bravia. The fruitless and counterproductive battle led by Sony to impose its Blu-Ray disc, while its opponents were promoting HD-DVD, has led the market of high-definition to be blocked for about 2 years.
Two years during which nobody got equipped, while the R&D and market research costs had to be paid. Today, Sony has won this battle, but is losing from a financial point of view; the pay-back will occur in the coming years, now that the blockade is over. Finally the Playstation 3, the flagship of Sony’s know-how, is made up of high-quality components (starting with a true Blu-Ray reader). Until very recently, despite the fact that the PS3 is very expensive, Sony was losing money on every console that was sold.
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