The plan, dubbed "Transformation 60", was announced after Sony Corp. revealed disappointing results to September last week but chairman and chief executive officer Nobuyuki Idei said a turnaround was in the works.

"Sony will be 60 years old in 2006," Idei told a news conference. "We strongly feel that we want it to become a strong, muscular entity."

The company announced new measures aimed at trimming 330 billion yenbillion dollars) in annual fixed costs by March 2007 from March 2003 levels, and boosting its operating profit margin to 10 percent from four percent.

They included plans to reduce its 200 manufacturing, logistics and service facilities worldwide by 30 percent and to cut the number of cathode ray tube (CRT) television production lines to five from 17.

The job reductions, amounting to some 13 percent of Sony's 154,500 workers as of March, excluding the finance sector, would be conducted through voluntary retirement, hiring restrictions and non-extension of contracts, the company said.

Some 7,000 jobs would be eliminated in Japan, while virtually all CRT production in Japan will come to an end this year, it said.

The turnaround plan also focused on remaking Sony into a "global media content company" merging its successful PlayStation game, movie and electronics businesses, Idei said.

Sony Computer Entertainment chief executive Ken Kutaragi called the first phase of the transformation a "black hole", which sucked in its electronics and computing skills with its movie and music content capabilities.

After that, "we would like to create a big bang," Kutaragi said. "This is the creation of new markets."

By combining its PlayStation and a television, for example, "we can come up with a very unique product," Idei said.

Sony also said it would tie up with South Korean microchip giant Samsung Electronics to make liquid crystal display (LCD) panels in early 2004 and reorganize its financial services businesses under a holding company in April.

The company will shift production of cheaper mass market goods to China and elsewhere in Asia, while retaining production of higher added-value devices such as semiconductors in Japan.

Sony announced Monday it was tying up with Japanese mobile phone giant NTT DoCoMo Ltd. to unveil mobile "wallet phones" mounted with smart-cards allowing users to chat, send email and buy products on a trial basis in December.

In April, the thumbs down from investors to Sony's earlier plan to overhaul its global structure and its worse-than-expected full year earnings for the year to March caused a "Sony shock" which helped drive Tokyo's Nikkei 225 index to a two-decade low.

Ahead of Tuesday's announcement, Sony shares closed 40 yen or 1.05 percent higher at 3,860 yen, in line with the benchmark Nikkei 225 index, which gained 1.02 percent on the day.

Sony said last week that its group net profit fell 25.3 percent in the three months to September to 32.9 billion yen, although sales rose slightly to 1.797 trillion yen from 1.789 billion yen a year earlier.

SPACE.WIRE