Sony laying off 7% of work force

Home entertainment division cuts reflect DVD downturn

Sony has quantified its latest round of pink slips at 450 layoffs or nearly 7% of the Culver City studio's worldwide work force of 6,800 employees.

Another 100 open positions will be eliminated. More than half of the layoffs will hit its home-entertainment division and various areas of IT staffing, reflecting a continuing industrywide decline in DVD revenue. Most of the pink slips will affect U.S. employees.

In March, Sony laid off 250 workers and eliminated 100 open positions.

In a video message to employees, Sony Pictures Entertainment co-toppers Michael Lynton and Amy Pascal attributed the moves to a changing entertainment landscape. The duo were unavailable for interviews, but a corporate spokesman provided a partial transcript of their recorded remarks.

"Amy and I have spent a lot of time thinking and talking and worrying about the impact that this has on people," Lynton said. "We understand that they're very, very difficult. We also, though, have to look to the future and make sure that the people who we do work with every day have a very good work environment and that the environment that we've created collectively, as a studio together, is the best possible one moving forward."

Added Pascal: "Our industry is affected by two things: It's affected by the economy, of course, and it's affected by technology. 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."

In a letter to employees, the execs said "a new operating model" in home entertainment and IT was behind the job cuts in those areas. Final decisions on where job cuts would be made were pending, but most of those being dismissed will be notified by the first week of March, Lynton and Pascal said.

"The business is going through a rough period of trial and transition, and we have an obligation to take the steps necessary to get through it," the execs said.

Sony officials also suggested that an increased emphasis on digital-distribution strategies will allow a less labor-intensive approach to home-entertainment releasing.

Several studios announced sizable job cuts early last year, but the Sony move represents the first in 2010. The layoffs news follows a year in which Sony ranked fourth in domestic boxoffice market share, though execs said 2009 represented one of the studio's most profitable theatrical years ever.