Saturday, May 19, 2018
Business

Bleeding cash, Sony slashes jobs and tries to regain focus

TOKYO — Sony chief executive officer Kazuo Hirai plans to win back customers from Apple by concentrating on mobile devices, games and digital imaging.

TVs aren't on his list.

Hirai is falling back on products that made Sony a trendsetter in the 1980s before competition with Apple and Samsung Electronics pushed it into four consecutive losses, culminating in Thursday's announcement the company will eliminate 10,000 jobs. Sony also will take a one-time charge $926 million as restructuring costs this fiscal year.

The emphasis on three "core businesses" comes after Sony lost $8.8 billion on TVs in the past eight years as demand for its Bravia models slumped. Hirai will cut costs at the TV operations and reduce the number of models in an effort to reach the same profitability target set by former CEO Howard Stringer in 2005.

"The market's expectation about Sony is for the company to again become a creator of the Walkman," said Yuuki Sakurai, chief executive officer at Fukoku Capital Management. "That's a tough goal, as the times have changed."

Hirai's initiatives include bolstering the digital imaging, games and mobile businesses; turning around the TV division; expanding in emerging markets; creating new businesses and accelerating innovation; and realigning the business portfolio.

Asked what the company would do if the TV business didn't return to profit by the targeted March 2014, Hirai said it's "natural for us to consider various contingencies." Sony is the world's third-largest TV maker.

Hirai, who took the top job this month after earning a reputation for turning around the PlayStation game business, said in February it was "very difficult to imagine Sony getting out of the TV business."

Apple will debut a TV within a year, Brian White, an analyst at Topeka Capital Markets, wrote earlier this month.

Sony plans to strengthen the three segments so they generate 70 percent of revenue and 85 percent operating profit at the electronics operations in the year ending March 2015, the company said Thursday.

Sony, worth more than $120 billion in 2000, is now valued at $19 billion, compared with $584 billion for Apple and $164 billion for Samsung.

The job cuts announced Thursday will include employees expected to be transferred outside of the group as part of the sale of businesses and other realignments, Sony said.

The company has cut 66,500 jobs in four restructuring plans since 1999, according to a spokesman. It had 168,200 employees as of March 2011, according to data compiled by Bloomberg.

Sony will consider selling or forming alliances in businesses that are losing money, have small room for growth or have little synergy with its core electronics operation, Hirai said.

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