The Sony (SNE) System For Handling Layoffs: Fight Them

At most companies when the CEO says it’s time to go, it’s time to go. Not at Sony (SNE).

The CEO, Sir Howard Stringer, wants to dump a bunch of people in the company’s electronics operation. Much of what is made at the unit, especially TV screens are now becoming commodities. Spending a lot of money on R&D and product management is a waste.

According to the FT, "Tensions are rising within Sony over a restructuring aimed at cutting billions of yen from costs, with Sir Howard Stringer, its British-born chairman and chief executive, pitted against what one senior figure called an `old guard’ of managers in its electronics division."

The move is audacious, but it may be the leading edge of a new way that employees face layoffs. Key workers may simply band together and tell management that cutting staff will result in business disruptions.

The practice has been part of the blue collar labor movement for decades, but it has rarely migrated to the level of technical and skilled employees. Airline pilots sometimes walk off the job to avoid seeing their ranks thinned out, but having engineers draw a line may not have a precedent, at least not on any large scale.

One exception to the rule is Boeing Co. (BA) whose engineers are unionized.  Last month, the aerospace company came to terms with the union, avoiding a second costly strike.  Worries about labor unrest have depressed Boeing’s stock.

Big business may face a new obstacle as it looks for job cuts. Some key groups of workers may tell management that if people are going to be pushed out the door, so is the company’s ability to do business.

Downsizing is taking an ugly turn

Douglas A. McIntyre