Sony to axe 5,000 jobs in major restructuring as losses mount
The Japanese company said on Thursday the restructuring will cut 5,000 jobs and trim ¥100bn (£605m) a year from fixed costs in the longer term. Losses in the TV business have long dogged its efforts to compete with global consumer electronics giants like Apple and Samsung.
With restructuring costs rising at the same time as core mobile and home entertainment businesses fall short of its expectations, Sony said it now forecasts a net loss of ¥110bn in the fiscal year ending in March. It previously expected a net profit of ¥30bn.
The job cuts, which will come in both TV and PC divisions, are to be implemented by March 2015. The cost savings are to kick in by the 2015-2016 financial year, Sony said.
Sony said the Vaio PC division, as widely expected, will be sold to investment fund Japan Industrial Partners, which will set up a separate company to take over the operations. Financial terms of the sale weren't disclosed, but Sony will initially hold a 5% stake in that company, according to The Guardian.
The TV operations will be spun off into a separate unit by July 2014, Sony said.
Having last turned an annual operating profit in the 12 months ended March 2004, Sony's TV business piled up losses of ¥761.9bn in the nine fiscal years before the current one. Sony officials on Thursday said they expect to lose another ¥25bn on TVs this year.
Buoyed by a strong performance in its financial services unit in the October-December quarter, Sony posted an operating profit for the three months of ¥90.3bn, up from ¥46.43bn a year earlier. That was above a consensus forecasts of ¥71.9bn , the average of estimates from six analysts surveyed by Thomson Reuters.
But with core businesses like its smartphone, PCs, TVs and audio operations weaker than it expected through the first nine months of the fiscal year, Sony slashed its full-year operating profit forecast to ¥80bn from the ¥170bn it previously expected.
