In something of an unexpected twist, electronics manufacturer Sony (NYSE:SONY) announced plans for major job cuts in its PlayStation division. The move should have prompted excitement among investors, but apparently, it prompted revulsion instead. Sony shares are down fractionally in Tuesday morning’s trading.
Sony announced plans to drop 900 employees from its PlayStation operations, roughly 8% of its worldwide workforce. The cuts will vary in depth and severity depending on where you look; for instance, the London studio is poised to be shut down in its entirety, while other studios will see smaller cuts.
These layoffs can mainly be attributed to a decline in sales projections for the PlayStation 5, which was released back in 2020. The sales drop shouldn’t really come as a surprise since most gamers who want a PlayStation 5 already have one by now.
Further Disturbing Developments
This would be bad news in and of itself, but it gets worse. Sony is still dealing with the fallout from the closure of Funimation’s streaming service. It announced that customers would lose their digital libraries, a move that isn’t sitting well with people who made a purchase in good faith and expected to have access to those titles forever despite the planned move to Crunchyroll.
Meanwhile, Sony is facing a lawsuit in the UK, where it’s alleged that Sony’s control of the PlayStation means there’s unfair pricing for games and other add-ons for the PlayStation platform.
Is SONY a Buy or Sell?
A look at the last five days in trading for SONY stock shows comparatively quiet movement. At least, until yesterday, when a small general decline turned into a near-vertical drop. The downward pattern continued into today’s trading, causing investors to lose 3.32% during the past five days..
