Sony Doubles Projected Annual Loss to $6.4 Billion

Sony is increasing its projected annual loss this year to almost double its original estimates. Due to massive tax charges, the Japanese company expects to lose 520 billion yen (US$ 6.4 billion) this fiscal year, which is likely to prompt the company to do massive job layoffs in an attempt to rise out of the red.

Sony Corp. Chief Financial Officer Masaru Kato speaks during a press conference at the Sony headquarters in Tokyo Tuesday, April 10, 2012. Sony more than doubled Tuesday its projected annual loss to 520 billion yen ($6.4 billion), its worst red ink ever, due to a massive tax charge. (AP Photo/Koji Sasahara)

Sony earlier estimated 2011 fiscal year losses at 220 billion yen (US$ 2.7 billion) in the light of weak TV sales and production problems stemming from the Thailand floods. However, the company expects an additional tax expense of 300 billion yen (US$ 3.7 billion) in its fourth fiscal quarter that ended March 30, 2012.

Operating loss forecast remains unchanged at 95 billion yen (US$ 1.2 billion), although the company expects to make a profit again by 2013.

Sources close to the company say that Sony is likely to cut 10,000 jobs in a bit to cut losses, reports the Associated Press. These remain to be unconfirmed by Sony, though. Fiscal year 2011 is the fourth consecutive year of losses for the Japanese company, which new CEO Kazuo Hirai will have to overcome.

Sony has been a driving force in the electronics business in the 1980’s and 1990’s, although recent shifts in the consumer electronics and technology landscape has spurred a handful of new dominant players like Apple and Google, which have overtaken Sony in various core businesses like entertainment and mobile phones.