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.
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.