Sony plans to cut 10,000 jobs, reduce TV models
Tech giant projects $6.4 billion in fiscal 2011 losses
Electronics behemoth Sony, battling years of losses, on Thursday said it will slash 10,000 jobs and slim down its far-flung TV line in an effort to right its ailing business.
Sony’s massive overhaul comes two days after the electronics maker forecast a more than twofold increase in losses, from $2.7 billion to $6.4 billion, than previously projected for fiscal 2011.
Newly minted CEO and President Kazuo Hirai held a news conference in Tokyo, where he outlined a turnaround strategy aimed at putting Sony on a path to profitability. “Now is the time for Sony to change,” Hirai said. “Everyone at Sony is standing together to make this happen.”
The company expects to reduce the number of TV models by 40% in the next year. That decision comes after Sony recently completed the sale of its share of an LCD plant to Samsung. Sony expects the combined moves to return the division to profitability in the next two years.
“The most pressing issue the Sony Group faces right now is the rebuilding and future growth of the electronics business,” Hirai said.
Sony’s once-hip brand — its Walkman was as iconic as an iphone — in the 1980s inspired the late Steve Jobs of Apple. But recently, it has trailed in mobile electronics and found little traction in smartphones or tablets, areas dominated by Apple, Samsung and HTC.
“It sounds like that is going to be more of a focus for them,” says Forrester analyst Sarah Rotman Epps. “It’s a highly competitive market. They’re going up against . . . established market leaders.” Also, Nokia and Microsoft are making moves with the next generation of Windows Mobile in a bid for mobile devices that will compete against Sony, she says.
Meanwhile, Sony’s entertainment and financial services divisions remain stable and poised for future growth, Hirai says. Sony wants to boost its digital camera and games businesses, too.
Sony forecasts an operating profit of $2.3 billion for the year ending in March 2013. The company will announce earnings and projections on May 10.