Sony Confirms 10,000 Job Cuts in Attempt to Restore ‘Former Glory’
Embattled Japanese company Sony wants to restore its former glory, and will be cutting 10,000 jobs worldwide to support this goal. This job cut, amounting to about 6% of the company’s workforce, is part of Sony’s business strategy as defined by new CEO and President Kazuo Hirai. Sony will have to face deep losses in the next few fiscal years, and the layoffs are considered a bitter pill the firm has to swallow in order to get back in the black in the short term.
In a press conference, Hirai has pledged to revive the ailing electronics company by focusing on its core electronics business. “Employees too want to restore Sony to its former glory and go beyond,” Hirai told journalists. “Sony will change. I’ve fully dedicated myself to changing Sony,” adds the new CEO, who took over from Welsh-born Howard Stringer this April, during whose stint Sony faced challenges from other dominant companies in its smartphone, television, digital camera and other businesses.
Sony will cut costs in order to make its TV business profitable again after eight consecutive years, says Hirai. The company forecasts getting back in the black by 2014. The cost of job cuts and restructuring will be at about 75 billion yen (US$ 927.5 million) this fiscal year. The job cuts have earlier been hinted at, although Sony is only confirming this move now.
Aside from restructuring, Sony is also targeting an increased presence in emerging markets like India and Mexico, where it targets 2.6 trillion yen in sales (US$ 32.1 billion) through March 2015. Hirai has also expressed interest in expanding the company’s medical equipment business, and will likewise enter into the medical diagnostic business.
Sony has made a net loss forecast of 220 billion yen (US$ 2.7 billion) recently, which it increased to 520 billion yen (US$ 6.4 billion) due to increased U.S. tax liabilities. The company predicts a return to operating profit of 180 billion yen (US$ 2.2 billion) by end of fiscal year 2012 (March 2013).