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Sony makes job cuts official

The consumer electronics giant officially announces its 20,000 job cuts, as part of a major three-year restructuring strategy.

Sony made its 20,000 job cuts official on Tuesday.

The cuts, which affect 13 percent of its workers worldwide, are part of a major three-year restructuring strategy.

The first 7,000 jobs to go will be in Japan. No further details were given about where the other cuts would be made. Word of the cuts leaked out last week, but Japan-based Sony waited until Tuesday to announce them.

The cost of the restructuring is now estimated to be $3.09 billion ($335 billion yen), which is 10 percent higher than previous predictions. Sony said the changes are designed to help secure a consolidated operating profit margin of at least 10 percent by the end of 2006.

Sony has battled sliding profits after posting a loss for the first three months of this fiscal year because of poor sales of the PlayStation 2 and its Trinitron TV sets.

Sony's consumer electronics arm has suffered the most, largely because of the falling demand for traditional TV sets. The company is now pitching its hopes on flat-screen sets, where demand is predicted to rise to 32 million units in 2007, and has announced a joint venture deal with South Korean rival Samsung.

Sony also said its financial services division will be split off into a separate company in 2004, with the possibility of it being floated.