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Sony to slash 20,000 jobs

Sony is the world's biggest maker of consumer electronics.
Sony is the world's biggest maker of consumer electronics.

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(CNN) -- Sony Corp, the world's largest consumer electronics company, says it will trim 20,000 jobs from its global workforce over the next three years as part of a turnaround strategy designed to lift flagging profits.

Sony announced the job cuts in Tokyo Tuesday after the share market closed.

The global restructure will cost 335 billion yen ($3.05 billion) over the next three years.

The electronics and entertainment giant also says it aims to slash its annual fixed costs by almost $3 billion by 2006.

The job cuts represent about 13 percent of Sony's global work force of 154,500.

Sony also said it would set up a joint venture early next year with South Korea's Samsung Electronics, to build LCD flat panel displays for television sets.

It was the second joint venture announcement in as many days.

Sony and Japanese mobile phone giant NTT DoCoMo said Monday they would join forces to set up a services company that uses Sony's contactless smart-card chip technology. (Full story)

Sony's three-year restructuring plan is designed to combat price competition from more cost-efficient rivals. It is also burdened with too much inventory and a product lineup that has pushed margins down.

Last week Sony posted a 25 percent drop in profit for the September quarter, and cut its operating profit forecast for the full year ending next March to 100 billion yen ($917 million).

Though sales in the quarter rose slightly to 1.8 trillion yen ($16.5 billion), net profit dropped to 32.9 billion yen ($304 million), compared with 44 billion yen a year earlier.

Sony's result was hurt by softer returns from its videogame business, where software sales for its PlayStation console were down.

Sony said extra research costs in its videogame division and losses from movie box office failures offset strong sales of digital cameras and mobile phones.

Shares in Sony closed 1.05 percent higher at 3860 yen Tuesday, in line with a gain of 1 percent for the Nikkei. Sony shares are down 22 percent so far this year.

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