Sony to Cut 10,000 Jobs over Two Years, Sources Say

CEO Kazuo Hirai’s restructuring plan also includes division sales, spin-offs, and direct control of the TV division

   
Sony to Cut 10,000 Jobs over Two Years, Sources Say

Kazuo Hirai, who this month replaced Howard Stringer as Sony’s (NYSE:SNE) CEO, plans to cut 10,000 jobs at the company over the next two fiscal years, sources told the Wall Street Journal on Monday.

The cuts, which would trim about 6% of the company’s global workforce, are expected to be formally announced, along with other initiatives, on Thursday and would be completed by March 2014. Roughly half the reductions could come as Sony sells noncore businesses, such as its chemical-products division, which is being bought by the Development Bank of Japan, and as it spins off others, including a unit that makes small-to-midsize liquid crystal displays.

The company has forecast a $2.7 billion net loss for the most recent fiscal year, which ended March 31. One of the principal weak spots is the company’s TV business, which has been hurt by a strong yen and competitive pressures that have pushed prices of LCD TVs down in most markets, including the U.S. Sony announced last month that Hirai will retain direct control of the television division, which is forecast to post its eighth straight year of losses.

Sony and Nintendo (PINK:NTDOY) also face competitive challenges in the gaming console sector, as games that were once developed for use only with consoles are now configured for use on tablets and smartphones, including Apple’s (NASDAQ:AAPL) iPhone. Among the potential threats from Apple, which recently has hired video game industry veterans, would be the development of a joystick controller for use with the iPhone, iPad, and iPod Touch – an add-on that could prompt gamers to bypass dedicated game consoles such as Sony’s PlayStation and PlayStation Vita, and Nintendo’s 3DS and Wii.

The restructuring will be the company’s second major overhaul in four years, the Journal added, noting that Stringer had eliminated 16,000 jobs and closed a number of factories as economic conditions deteriorated in 2008. Stringer, Hirai, and five other executive officers are expected to forgo their bonuses for the last fiscal year, sources said.


Article printed from InvestorPlace Media, http://investorplace.com/2012/04/sony-to-cut-10000-jobs-over-two-years-sources-say-sne-ntdoy-aapl/.

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