Sony axes 10,000 workers, eyes up mobile and medical biz
Cash-squandering giant in global spring clean
Sony Corp confirmed today that it will lay off 10,000 workers worldwide in a move to turn around its TV biz, strengthen its core digital imaging, gaming and mobile divisions, and chase sales in emerging markets.
The consumer electronics giant's newly installed CEO Kazuo Hirai hoped that his strategy would allow loss-making Sony to return to profitability. The company said in a statement on its website:
As Sony moves to strengthen its core businesses and shift resources to growth areas, it will also restructure its headquarters, subsidiaries and sales company organisations in order to further enhance operational efficiencies.
As a result of these measures, Sony estimates that the headcount across the entire Sony Group will be reduced by approximately 10,000 in FY12. This includes employees expected to transfer outside the Sony Group as part of the sale of businesses and other realignments resulting from business portfolio optimisation.
Sony anticipates that many of these businesses will have future growth opportunities outside the Sony Group, and Sony will consider various measures to secure continuity of employment for employees at their new destinations. Sony is projecting restructuring costs of 75 billion yen in FY12.
Hirai replaced Howard Stringer at the start of this month, at which point he doubled the Japanese company's annual loss forecast to $6.4bn. Sony hopes to slurp 70 per cent of total sales and 85 per cent of operating income from its digital imaging, gaming and mobile wings by 2014. But Hirai can't deny that the task ahead of him is daunting.
On mobile, the company plans to integrate R&D, design engineering, sales and marketing operations of its smartphone biz, Sony Tablet and VAIO offshoots to get products to market faster, it said. Part of that strategy, which it hopes will lead to mobile sales of 1.8 trillion yen (£13.9bn, $22.2bn) by 2014, will include launching new mobile products, Sony added.
Its TV business remains in the red, however, but Sony is hoping to return that to profitability by its 2014 fiscal year. It described itself as a "new entrant to the medical industry", where it is punting peripherals such as printers, monitors, cameras and recorders. Sony hopes to bring in sales of 50bn yen (£387m, $616m) in that market over the next two years.
Additionally, the company will move into the medical equipment components sector and the life science industry. ®