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Sony Pictures to lay off 450 employees

Sony Pictures Entertainment is laying off 450 people, more than 6.5% of its global workforce, as part of a studio-wide belt-tightening move blamed on the growth of piracy and changing media consumption patterns, particularly the ongoing downturn in DVD sales.

PASCAL In a memo sent to Sony Pictures' approximately 6,800 employees Monday, Chairman Michael Lynton and Co-Chairman Amy Pascal said most of the layoffs would affect the home entertainment and information technology divisions. But all divisions will be affected, they said, including motion pictures, television, digital production and even the corporate suites.

Along with the layoffs, which will start in March, the studio is eliminating about 100 open positions.

"Our industry is affected by two things: It's affected by the economy, of course, and it's affected by technology," Pascal said Monday in a video message to employees. "Over the last two years, it's changed people's DVD-buying habits, which has had a huge effect on our company and the industry at large."

This will be the second time in a year that Sony Pictures has slashed its workforce. Last March, the studio laid off 250 people and eliminated an additional 100 positions.

Combined DVD and Blu-ray sales declined more than 13% in the U.S. last year. The downturn in what was once Hollywood's cash cow has had a big impact on every studio.

In December, Sony boasted that it had its best-ever box-office year in 2009, surpassing $3.5 billion in global receipts. But rising ticket sales have not been enough to compensate for plummeting home entertainment revenue.

Last week, Sony shuffled the executive ranks of its home entertainment division and made changes in its IT department. Lynton and Pascal said those shakeups were "first steps toward the creation of a new operating model for our studio."

-- Ben Fritz and Claudia Eller

Photo: Amy Pascal. Credit: Sony.

Comments () | Archives (14)

My comment is not targeted particularly at Sony Pictures, but I believe that if the top 10% of Sony employees took a 10% wage and bonus cut, all of these 450 people would not have to lose their jobs. The CEO's are getting a bigger piece of the pie than they deserve.

Although I agree with you Mike Vee, the execs at Sony are more accountable to their shareholders than the employees. it's not necessarily the right thing to do, but it happens nonetheless.

Yes, instead of essentially ruining 450 lives, they could have had a heart, and used their brain, and spread the pain. Sony certainly doesn't deserve my consumer dollars. A 13% sales decline is actually modest in this economy, and they certainly saw it coming - they were simply planning for they day when they could redistribute the wealth up to the wealthy. And Blu Ray, as great as the picture and sound are, is a non-starter as a mass market product - a spinning disc distribution system is very 1999.

The real problem is with the over paid movie stars, they never really worked for a real days wages, they are way over paid to be a clown


This is gonna increase unemployment. Govt. must do something to help them.

The problem here, is the same for all of America: 'You can no longer hold onto your cash-cow business models, you MUST change'. Sony, like all of the older monster sized corporations in in this country are actively trying to hold onto cash flows developed by old business structures. The record industry, which delivers chump-change for gross annual revenues, fell first and fast due to their block-headed stubbornness in adapting change. The movie industry moved faster, but not fast enough.

When the major movie and music business managers stop applying the equivalent of a Model-T to a modern-day Autobahn, maybe they will find the type of success the crave, with profits that are in line with the pricing models that the web demands. The first place to start is for these studios to act more like internet companies, with open minded Silicon Valley type management teams, who's minds are not limited by the legacy Hollywood dictatorship system that spawned from the great old days of MGM.

Bill Wilkins, CEO
Melted Metal Web Radio

The "open minded" Silicon Valley executives have not done much better and I find it hard to beleive someone would recommend them as the model of efficient and forward thinking management. They could not foresee and adjust to the Internet crash of 2001 when all the business dried up.
They had to resort to huge layoffs and Silicon Valley has not seen those boom days again. Where is AOL ? Where is Sun Micro Systems? Where is Silicon Graphics? Where is 3COM?

When people are not buying or are unwilling to pay as much as before then it does not matter you are a Hollywood executive or an "open minded" Silicon Valley executive. The business goes down.

I agree with the majority opinion who cared to post their comments about this latest news. In these economic conditions freezing salary raises and cutting non essential perks and costs are better management decisions and preferable to layoffs.

What does IT have to do with losing revenue? Why is it that IT always has to pay when the business is mis-managed?

If Sony Pictures wants to trim costs, why not start at the top and get rid of Michael Lynton or Amy Pascal... or both!!

No...instead they pick on IT let go of the CIO, Rick Hopfer. A class act if I've ever worked for one.

Don't pick on the IT guy who keeps everything running while other idiots allow first run movies to show up on the streets minutes after their openning weekend.

Where's the CTO in all of this? Isn't it HIS job to keep pirating down?

Outsourcing IT Jobs to India is NOT the solution to Sony Pictures losing money.

I used to work across the street from Sony.
A marketing VP could be making around $160k+ annual, and then their bonus of probably around $30k+. An assistant could be making around $45k+, a manager level around $60k and an assoc director around $80k. the latter could be getting around $5k+ annual bonus.

Your IT analyst guy could probably make around $80k+.

sending jobs to india, their engineers there would make around $10k+ annual.

this whole thing is going to turn into a circus, the VPs and their assistants have a lot of expectations with their IT guys. The guy in India can only answer the phone and redirect the problem for somebody else to solve. oh wait, there's no IT guy working in the studio!

"There are no IT guys working at the studio ??"
Where did 'you' go to school?!

Also, comparing a bone-headed legacy entertainment business with Silicon Valley, and the inevitable busts that come with heavily capitalized risk during a once-in-a-century boom event is shear ignorance.

The web 2.0 crowd are busy using this sad news of layoff to promote their web sites and at the same time ridicule Holywood executives and pretend to be smarter than anyone else. It is as if they have a track record of doing a lot better than others.

The movie industry has seen what happened to the music industry in the digital age and they must figure out a way to keep the industry healthy. All indications are that they are trying to find a new model but they are not there yet and it is doubtful that it will be painless. Recent changes to the agreement between certain movie studios and NetFlix is just one example of this.

Back to the main point of the article, there are certain short term solutions that could have been implemented to avoid layoffs in this dire economic conditions. Those methods are always preferable specially since the business is still profitable.

Sure, I use other sites as tools within my marketing strategy. But if you run a Google on me, you will see that I have something very poignant to say, with a point of view that is pro-business and anti-greed. Rarely does a site pass on me, because the points I make hold water. I also put myself out there- you know who I am, and unlike many, I'm willing to argue my positions.

By the way, Sony is still profitable 'because' of the layoffs. They may be greedy and obstructionist, but they're not stupid- why reinvest their profits within a declining segment?

The idiocy posted here explains why this country is having problems. Corporations already operate under myriad regulations. If they think a layoff is proper, that's their business. We've got too many wussies in this country that want business and government to act as their surrogate parents. Grow up!


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