Change has become the buzzword at the Japanese electronics giant, after its new CEO Kazuo Hirai announced a major restructuring drive aimed at staunching massive losses. Layoffs are part of Sony's survival strategy.
Japan's electronics maker Sony would cut about 10,000 jobs and shed lossmaking businesses to regain profitability, Chief Executive Kazuo Hirai announced Thursday.
After taking over as Sony CEO from Howard Stringer this month, Hirai said he was prepared to take "painful steps," aimed at cutting fixed costs in the company's ailing TV business by 60 percent over the business year starting in March 2013.
In addition, operating costs are to be reduced by 30 percent under the restructuring program, costing Sony about $926 million (712 million euros) in the current fiscal year, he said.
Sony is struggling amid weak demand, fierce competition and a strong national currency which resulted in a record loss of $6.4 billion (4.87 billion euros) in its last fiscal year that ended in March.
"We have heard a multitude of investor voices calling for change," Hirai told a news conference in Tokyo, and added that Sony "will change," driven by the company's "entrepreneurial spirit."
Former consumer electronics bellwether Sony is eager to revive its brand in the face of stiff competition from US gadget maker Apple and South Korea's Samsung Electronics. In terms of market value, Samsung is 10 times more valuable than Sony, while Apple is worth 30 times more.
In efforts to boost new business opportunities, Sony said it was expanding its growing medical business, targeting annual sales of 50 billion yen (470 million euros) this year.
At the same time, 5,000 workers would come off Sony's payroll after the firm had sold its chemical business and a liquid crystal display maker, the company's chief financial officer Masuro Kato said.
In addition, CEO Kazuo Hirai has reorganized the firm's internal structure, giving him a more active role in operations.
All the heads of Sony's 14 business units now report directly to him, and he took charge of the home entertainment section to personally oversee restructuring at the company's lossmaking TV business.
uhe/gb (Reuters, dpa)