Sony is to cut around 10,000 jobs – 6% of its global workforce – as new CEO Kazuo Hirai moves to reduce costs and staunch huge losses at the Japanese electronics giant.
After a brief honeymoon since taking over from Howard Stringer this month, Hirai this week doubled Sony’s annual loss forecast to a record $6.4 billion, and is under pressure to fix an ailing TV unit and turn around a brand that has been trampled on by consumer gadget leaders Apple and Samsung.
“We have heard a multitude of investor voices calling for change,” Hirai said. “Sony will change. Sony has always been an entrepreneurial company. That spirit has not changed.”
Sony said it would post a restructuring charge of about 75 billion yen (£600 million) in the year to March 2013, and aims to cut its fixed costs in the TV business by 60% in the 2013/14 business year from this year’s levels, and trim 30% off the business’ operating costs.
Sony will change. Sony has always been an entrepreneurial company. That spirit has not changed
Eyeing new business opportunities in the fast-growing medical business, Sony said it was targeting annual sales of 50 billion yen in that sector in 2014/15, and was scouting for acquisitions and other strategic investments.
The job cuts follow two rounds of layoffs Stringer made in his six-year tenure at Sony. Chief Financial Officer Masaru Kato noted earlier this week that around 5,000 workers would come off the Sony payroll with the sale of a chemicals business and a small liquid crystal display fabricator.
Japan’s crisis
Sony, and other leading Japanese TV makers Sharp and Panasonic, have been battered by weak demand, fierce competition and a stronger yen that makes exports less competitive.
The three companies expect a combined loss for the year just ended of $21 billion – more than Sony’s entire market value, which has slumped by close to a fifth in the last month. Samsung is 10 times more valuable, while Apple, which Sony executives considered buying in the early 1990s, is worth 30 Sonys.
“Japan’s consumer electronics industry is facing defeat,” Fujio Ando, senior managing director at Chibagin Asset Management, said earlier this week.
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