The Sony Electronics announced that it will eliminate 10,000 jobs globally, slash a number of factories, cut 15 business categories, and reduce costs by $1.8 billion in an ambitious restructuring bid to revive its faltering electronics business.
Sony said it would downsize or dispose of 15 business categories, which it did not name. There was no mention in the announcement of how the cuts might impact Sony’s broadcast equipment business.
Under new management since March, Sony said it expected a group net loss of 10 billion yen ($90 million) in the current fiscal year as the plunging prices of consumer electronics products have taken a hefty toll on earnings.
The changes, to be put in place by the end of fiscal 2007, which runs through March 2008, would result in a reduction of 4000 workers in Japan and 6000 elsewhere, while factories would be cut from the present 65 to 54, company officials said.
With more than 151,000 employees worldwide, that amounts to about a 6 percent cut in its workforce, the Associated Press reported.
The latest turnaround plan comes under the fresh leadership of Howard Stringer, a British-American dual citizen who was named chief executive of the electronics and entertainment company in March as the first foreigner to head Sony.
Sony has lost money in its electronics sector for two straight fiscal years, and has relied on its movie division such as the popular “Spider-Man” series and its successful PlayStation consoles in its computer video-game unit to lift profits in recent years.
President Ryoji Chubachi, also head of the electronics division, conceded that his company wasn’t making products that people wanted to buy and that Sony’s technological prowess had declined. Sony said it would focus now on so-called “champion products” including the PlayStation 3, Bravia liquid crystal display televisions and the Walkman portable music players.
Under the plan announced last week, the company said it would review real estate, stock holdings and other non-core assets and make disposals of some 120 billion yen ($1.2 billion) by March 2008.
To cut costs, Sony said it would reduce the number of models by 20 percent compared to the current fiscal year, and reduce the number of factories by 11 to 54. Sony did not specify which businesses would be trimmed.
Over the last five years, Sony shares have lost two-thirds of their value, and are currently trading at about $36.