Dec. 10 (Bloomberg) -- Sony Corp., the world’s second- biggest maker of consumer electronics, fell in Tokyo trading on concern a plan to cut jobs and investment won’t be enough to revive earnings.

Sony dropped 1.2 percent to 1,874 yen as of 12:33 p.m. on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average gained 2 percent. The company said yesterday it will cut 16,000 jobs, mainly at its electronics business, reduce investment and farm out production by March 2010 as part of plans to save more than 100 billion yen ($1.1 billion) annually.

Goldman Sachs Group Inc., UBS AG and Mizuho Financial Group Inc. said the measures are insufficient to revive profit. Flagging demand for electronics forced Sony to announce the biggest job reduction by a Japanese company since the credit crisis drove the global economy into recession.

“It is difficult to see profitability being reached through restructuring based on staff reductions,” Shunsuke Tsuchiya and Hitoshi Shin, Tokyo-based analysts at UBS who rate Sony “neutral,” wrote in a report dated yesterday. “We think additional measures including game/mobile phone operations will be needed.”

In the three months ended Sept. 30, Sony, also the maker of PlayStation 3 game consoles, had a 39.5 billion yen loss at its games business. Sony’s Chief Financial Officer Nobuyuki Oneda said on Oct. 23 that it will be “difficult” to turn the money- losing unit profitable this fiscal year.

Sony said on that day that overall net income will probably drop 59 percent in the year ending March 31, reducing the outlook by 38 percent as the stronger yen and slumping demand undermine sales of its electronics including Bravia televisions.

Sony Ericsson Mobile Communications Ltd., the mobile-phone venture between Sony and Ericsson AB, reported on Oct. 17 a net loss of 25 million euros ($32.3 million).

To contact the reporter on this story: Hiroshi Suzuki in Tokyo at Hsuzuki5@bloomberg.net

Last Updated: December 9, 2008 22:47 EST