Sony Layoffs Confirmed: CEO Will Cut 10,000 Jobs, Turn Around TV Business

TOKYO -- Faced with mounting losses, Sony Corp. said Thursday it will slash 10,000 jobs, or about 6 percent of its global workforce, and try to turn around its money-losing TV business over the next two years.

New CEO and President Kazuo Hirai outlined his business strategy at a big press conference where he pledged to revive the electronics and entertainment company. Sony earlier this week more than doubled its annual net loss projection for the fiscal year through this past March to 520 billion yen, or $6.4 billion. That would be its fourth straight year of red ink and worst loss ever.

"As CEO, I take this very seriously. But at the same time, it strengthened my resolve to transform Sony," Hirai told hundreds of journalists. "Employees too want to restore Sony to its former glory and go beyond."

Sony, whose businesses run from digital cameras and personal computers to PlayStation game consoles and movies such as "The Smurfs," has been battered by competitors including Apple Inc. and Samsung Electronics Co. For years, it has been struggling to regain the swagger and innovative flair that made it a dominant force in the 1980s and early 1990s.

The company has also been hit over the past year by production disruptions from flooding in Thailand and a strong yen, which reduces income from exports.

"Sony will change. I've fully dedicated myself to changing Sony," said Hirai, 51, who took over the helm from Welsh-born Howard Stringer this month.

Hirai said he was committed to strengthening the company's mainstay electronics business – which includes digital cameras, games and smartphones – by concentrating investment and technological development in this division. He aims to boost its share of overall company sales to 70 percent by the year through March 2015 from current 60 percent.

Through cutting fixed and operating costs, Sony will make its TV business, which has lost money for eight straight years, profitable again by the fiscal year through March 2014, he said.

To cover the job cuts and restructuring efforts, Sony will take a 75 billion yen charge this fiscal year.

Sony also will also seek new growth in emerging markets such as India and Mexico, targeting 2.6 trillion yen in sales by the year through March 2015.

Sony also plans to expand its medical equipment business with products such as endoscopes and will enter the medical diagnostics business.

The company aims for 8.5 trillion yen in overall sales for the year through March 2015, up from a forecast of 6.4 trillion yen for the just-ended fiscal year.

In February, Sony raised its net loss forecast to 220 billion yen. But on Tuesday, it further revised that to a 520 billion yen loss, mainly blaming an additional tax expense of 300 billion yen stemming from revaluing U.S. tax credits that are unlikely to be used due its string of losses.

It stuck with its operating loss forecast of 95 billion yen ($1.2 billion). Sony predicts a return to an operating profit of about 180 billion yen for the year through March 2013.

It will release earnings results and forecasts on May 10.

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Comments

[tuliehowller]

10:32 PM on 04/12/2012

SONY's quality edge has gone. Once upon a time they were the premier electronics company in the world for quality and could charge a huge premium and get it....their SONY VIAO was terrible, under powered and over priced and the ad-ons never worked.....it will take more than layoffs to repair their reputation.

[axt113]

09:26 PM on 04/12/2012

Hit its weak point for massive layoffs!

[Ricardo Nest]

05:05 PM on 04/12/2012

What are they going to do next sell their patents? (http://bit.ly/HqPrtY)

[Maxedaddy]

04:53 PM on 04/12/2012

Sony has a very old business model. The new business model for success are giving things to your customer (Amazon & Google) and give them great customer service as to get them interested and become loyal customers. Sony overprices their equipment which is there biggest problem. How do you get people to buy your overpriced items instead of the same or equal to Sony's equipment from other competitors who are willing to make a lot less profit per item and even give you bonuses for buying from them? Sony has to change its business model and get their elitist head out their rears! If Sony became more consumer friendly we might be willing to overlook the fact that they have been snubbing their nose and attacking the public for years. I don't think Sony will save themselves in the end. That whole thing where they came after George Hotz did not sit well with the whole public.

[Patricia013]

05:34 PM on 04/12/2012

You are so right. Today's businesses cannot rely just on their brand name. In my book, Amazon is king for customer service. I just called them with a problem with my Kindle Fire.....they immediately "created one" for me and sent it out by express mail...all free of charge. When I got the new kindle they had populated it with everything my old kindle fire had. I also sent back the old kindle free of any shipping charges. You cannot beat service like that. There service has been just as good with everything I bought from them...which was a considerable amount last year and included a 42" flat screen.

[Maxedaddy]

06:12 PM on 04/12/2012

AMAZON! AMAZON! AMAZON! Yes that's right i am starting to feel like a fanboy!

[hotradiodj]

04:25 PM on 04/12/2012

Sony's marketing efforts doesn't perform well in the U.S. The product launches and ads are tested in Tokyo and have little to attract regional consumers. It's not the product to a certain degree, it's the knowledge and exposure of them to consumers.

[Nightangle]

03:13 PM on 04/12/2012

Most of the layoffs will probably from all over the US about 5,000-6,000 workers. Good strategy for Japan for several reasons.

Doing business is the US is just too complicated and costly - Unions, business interuptions caused by strikes, too much regulations, and most of all - the quality of US workforce.

The propose cut of 10,000 workers are employed by Temp Agencies NOT SONY and have no employee-employer relationships with Sony.

Japan workforce are very adaptable in 21st century technology. US workforce is archaic, 33-40% of which are functional illiterates, thus work products are inferior. Unions, work stopage, and comlicated regulation - the cost of doing business in USA is over and above any profits, thus, foreign companies have no incentives in doing business here.

Japan is looking to do more business with its neighbor - China whose workforce are more adaptable and technologically trained.

Japan is looking to China's 1.4 prospective consumers. US wage have not really improved for the last 20-years, and our purchasing powers is declining faster. Recession will only make it worse.

Yahoo just anounced 2,000 layoff; USPostal 30,000; Tech companies lay off over 19% total, Sear, JC Penny and now Sony.

Guess who will pay for Unemployment Benefits - the US Federal Gov will.

[Patricia013]

05:38 PM on 04/12/2012

"Japan workforce are very adaptable in 21st century technology. US workforce is archaic, 33-40% of which are functional illiterates, thus work products are inferior. Unions, work stopage, and comlicated regulation - the cost of doing business in USA is over and above any profits, thus, foreign companies have no incentives in doing business here."

What a pile of bull pucky! The american worker is educated and is adaptable and is a fine worker! How dare you come here and put down americans???

[Nightangle]

06:42 PM on 04/12/2012

Statistics do no lie. And I am more of an American than you'll ever be.

[ReallySmarter]

01:37 PM on 04/13/2012

Cutting 10,000 jobs and another fiscal quarter where Sony lost billions on dollars. Most objective analysts and economists would tell you that Japan's aging workforce and 2 decades of snails pace growth (aka stagnation), but why pay attention to those "statistics".

As for the US, I guess you're right, most companies have no interest investing in the worlds largest economy. I do see plenty of Japanese transplants rolling sushi at food courts though

[Tquin]

02:59 PM on 04/12/2012

Obama can save them. He will cause some other company to leave the USA and move into Sonyland.

[Joseph Veverka]

02:57 PM on 04/12/2012

Maybe if they stopped making crap merchandise and came up with cutting edge products instead of sit on the side lines and let others lead then they would be hiring instead of laying workers off. When was the last time Sony announced a new product...the Walkman!

[Patricia013]

05:39 PM on 04/12/2012

They need to stop overcharging for their brand name....it isn't backed by superior products!

[tuliehowller]

10:35 PM on 04/12/2012

Their product was once considered the best but not anymore.

[dwill123]

02:53 PM on 04/12/2012

Romney's global economic plan.

[crow watcher]

02:04 PM on 04/12/2012

Sony will cut "6 percent of its global workforce"? How about cutting the salaries of those overpaid executives? You just might save 50% of the 6% who stand to lose their jobs.

[Mitchman57]

01:58 PM on 04/12/2012

Maybe Bain Capitol will save the day.

[tuliehowller]

10:39 PM on 04/12/2012

They would bankrupt the company, steal the workers pensions and then pay 14% on their income from those pensions.........I mean investments.

[monilove42]

01:55 PM on 04/12/2012

I hope this doesn't mean that they are going to cut "The Young and the Restless".

[xxeminemx39]

01:37 PM on 04/12/2012

ONCE AGAIN, THE "FREE MARKET", CEO'S CHOOSING PROFITS OVER EMPLOYEES

[red4182]

02:40 PM on 04/12/2012

Please explain $6 Billion in losses as a profit. With a few more years like this they will lay off 100% o the company.

[Maxedaddy]

05:00 PM on 04/12/2012

What he means is that Sony is so focused on making profits that they've forgotten to mark down prices to competitive levels. Instead they focus on their same old business model. Screwing & antagonizing the public. Amazon & Google could show you what todays business model is. Openness, freeness, giveness, & good customer serviceness! Not going after people like George Hotz who cracked his Playstation and Sony sued him for it! Sony deserves what its gotten. They lost business because of things like that. And guess who is next? That's right, Apple! Huge Apple Bubble will bust because of their elitist selfish business practices!

[earteaga31]

01:29 PM on 04/12/2012

This one is truly disgusting because Sony knowingly continued down the path of making second tier products yet over pricing them to fit the Sony "model." They should get rid of all the leadership that think it was a "good idea" to make a Google TV and that PSP nonsense.

[Robert Elliott Simmons]

12:02 AM on 04/14/2012

you realize the first PSP would one of their few successes in the past decade. Its the UMD format for movies that failed.

[Nikki cox]

01:18 PM on 04/12/2012

Bet they hate apples...