Tokyo: Sony’s European video-game unit has decided to cut jobs to grow more competitive, as the just-launched PlayStation 3 machine struggles against rival offerings from Microsoft and Nintendo that beat it to the market.
All Sony Computer Entertainment Inc. employees in Europe, totaling about 1,900 people have been told about the plan to cut jobs, but specifics, such as the number of cuts and which jobs will be affected, have not been decided, said Satoshi Fukuoka, the spokesman in Tokyo.
However the company has no plans to trim jobs in Japan or North America. Insiders say that Sony’s gaming business was critically hurt by the launch delay in Europe of the next-generation PlayStation 3. The job reductions in Europe reflect the company’s need to adapt to overall changes in gaming, not just the PS3 delay.
The game console, which competes against Microsoft Corp.’s Xbox 360 and Nintendo Co.’s Wii, went on sale in Japan and US late last year but was delayed until March in Europe because of production problems with a key component.
Gamers are increasingly using their machines for various kinds of entertainment, including linking to the Internet, watching video, listening to music or looking at photos, not just playing games.
“The way of enjoying entertainment is shifting,” Fukuoka said. “The move is aimed at maintaining our competitive edge in a changing business environment.”
In recent years, Sony has been restructuring and playing catchup to improve profit in its core electronics division, where it had fallen behind rivals in flat-panel TVs and portable digital music players.
But the hefty startup costs for PS3 are weighing heavily on its revival efforts. Another problem has been the PlayStation Portable, Sony’s first handheld gaming machine, whose sales are also lagging behind Nintendo’s offerings, including the hit DS, which comes with a touch-panel.
Sony, set to release earnings next month, has repeatedly said it expects its gaming division to lose money for the fiscal year.