Sony Pictures to lay off 450 as DVD sales fall (AP)

Yea, they losing crazy money. Wow!


LOS ANGELES - Sony Pictures Entertainment Inc., the studio behind the "Spider-Man" movie franchise, is laying off about 450 people and eliminating 100 open positions to cope with declining DVD sales.

The layoffs represent about a 6.5 percent reduction in the 6,800-strong work force at Sony Pictures, which released the Michael Jackson documentary "This Is It" and cataclysmic "2012" late last year. The studio also recently pushed back the release of "Spider-Man 4" by a year until 2012.

Most of the cuts at the studio, which is based in Culver City, will occur by the first week of March and will be in the home entertainment and information-technology units in the United States.

It's the second time in a year for the subsidiary of Japan's Sony Corp. to cut back.

Last March, it laid off nearly 250 people and eliminated nearly 100 open positions. That followed a move in October 2008 to reduce overtime, travel and executive benefits.

Staff were told of the latest cuts in a memo Monday and through videos by the studio co-chairs on an employee Web site.

"Our industry is affected by two things: It's affected by the economy, of course, and it's affected by technology," co-chair Amy Pascal says in the video. "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."

The home video market is crucial for studios because that is where they recoup much of the cost of producing movies. Yet the market has been sagging as people refrain from adding to their already well-stocked home collections and turn to rentals, which are far less profitable for Hollywood.

U.S. home video revenue fell 5 percent in 2009 to $20 billion, according to the Digital Entertainment Group, an industry association of studios and electronics firms.

DVD rental and purchase revenues dropped 11 percent to $16.4 billion, the group said. That overwhelmed a 67 percent gain in Blu-ray disc spending to $1.5 billion and a 31 percent gain in online and video-on-demand revenues to $2.1 billion.

Sony Pictures posted a quarterly operating loss of 6.4 billion yen ($71 million) in the three months to Sept. 30, while Sony Corp. as a whole is forecasting a 95 billion yen ($1 billion) loss in the year to March.