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Thursday, April 12, 2012, 04:15 am
Sony shedding 10,000 jobs as new CEO promises change
Sony's new CEO Kazuo Hirai announced on Thursday an aggressive plan to turn around the ailing electronics titan that will result in 10,000 job cuts.Hirai revealed at a new conference in Tokyo that the company's annual loss will reach $6.4 billion this year, almost twice that of earlier predictions, as noted by Reuters.
"We have heard a multitude of investor voices calling for change," Hirai said. "Sony will change."
According to the report, the change will come with a restructuring charge of 75 billion yen ($926 million). The company hopes to reduce fixed costs for its TV unit by 60 percent next fiscal year and cut operating costs by 30 percent.
The loss of 10,000 jobs results in a 6 percent reduction in Sony's workforce on top several rounds of layoffs in recent years. Hirai, who took over in February, has promised to take any necessary "painful steps" to improve the company's fortunes.
The company isn't alone in its struggles. Fellow Japanese TV makers Sharp and Panasonic have also fallen upon tough times.
"Japan's consumer electronics industry is facing defeat," Reuters reported Fujio Ando, senior managing director at Chibagin Asset Management, as saying earlier this week.
Rival device maker Apple is now worth more than 30 times as much as Sony in terms of market capitalization. The company's chain of successes have threatened Sony's businesses. For instance, the iPod has replaced Sony's Walkman as the modern music player, while the iPad and MacBook Air have disrupted the company's PC sales. The rise of iOS as a viable gaming platform has hurt Sony's PlayStation profits.
Difficulty in the smartphone industry led Sony to take full control of its joint venture with Ericsson earlier this month. The company paid $1.4 billion to buy out its partner. Even as Apple's iPhone has taken in a growing portion of the mobile phone industry's profits, Sony Ericsson lost €247 million last year.
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Previous Comments View All
Sony could just concentrate on the PlayStation brand for now.
Follow Apple's way - lots of plans but executed step-by-step. Don't rush. 
Or maybe it's time to bring back the person who shook Sony back then.
You were an electronics corporation, then a Music and Motion Picture Catalogue conglomerate, then a Game Console conglomerate, and each time you overreached your original vision suffered and your products cheapened, while prices kept going up.
The crash is inevitable.
Once you get as big as Sony you just start to make crap so people will buy your sh** again. And again.
Same thing will happen to Apple. Just give it time and all them iPhones and mac will b as disposable was those cheap a$$ printers by HP.
[...] For instance, the iPod has replaced Sony's Walkman as the modern music player, [...]
Sony blew it. They kept trying to force weird, proprietary storage formats on the public.
MiniDIsc. Memory Stick. UMD. ATRAC encoding instead of MP3. None of which did anything to
help the Walkman brand. Sony just donated the portable media player market to Apple.
[...] while the iPad and MacBook Air have disrupted the company's PC sales. [...]
Sony never controlled their own destiny in the Wintel PC market. No Wintel PC maker does.
Because they're all at Microsoft's mercy. And they'll all suffer when Windows 8 is released.
Windows 8 is the answer to a question nobody is asking.
Sony, Panasonic, et al could learn a lesson from Apple: too much choice is just confusing for the customer and must make it difficult to gain economies of scale in the manufacturing process. I've bought a lot of Sony kit over the years and it's always been good quality and very reliable but it's very depressing walking into my local Sony Centre these days. The staff all look bored and there's just too much crap. Compare that to the simplicity of the Apple Stores. If you read one of Sonys product catalogues its just amazing how many products they make.
I don't know if it will work, but they do need someone aggressive, because what they are doing isn't working. Good luck to him. I have owned an original Playstation (years ago), a Sony TV and a Sony DVD player, all good quality, never let me down. I hope he can revive it.
They need nothing less than reinventing themselves.
I don't know if it will work, but they do need someone aggressive, because what they are doing isn't working. Good luck to him. I have owned an original Playstation (years ago), a Sony TV and a Sony DVD player, all good quality, never let me down. I hope he can revive it.
Sony's new CEO Kazuo Hirai announced on Thursday an aggressive plan to turn around the ailing electronics titan that will result in 10,000 job cuts.
This is pretty much par for the course when a new CEO starts as it means an instant reduction in expenses for the company and it makes it look like the CEO has justified their position. Fire 10,000 people on $30,000 per year = $300m saving, pay the CEO $15m and the company is $285m up. Well done, new CEO. While 10,000 people struggle to pay for their homes, this one individual gets to buy multiple homes. I guess it's all they can do at this stage though.
They are still making a loss in the Playstation sector - last year, they had a loss of $1b in one quarter. They probably would make more by just doing software for iOS and Android. A 500 million unit install base where the most popular activity is gaming and all you have to do is publish an app that gets first-time sales on every sale (no used games).
They could even republish a lot of PS2 titles and make an absolute killing in software sales for next to no effort. It would of course kill off their own portable hardware but not enough people are buying it anyway. 1.5m Vita buyers per quarter (at launch no less) is not going to work. Apple ships that many in a day when a new phone comes out.
Kill the Vita and get Gran Tourismo on my iPhone 4S, stat.
Hirai revealed at a new conference in Tokyo that the company's annual loss will reach $6.4 billion this year, almost twice that of earlier predictions, as noted by Reuters.
I wonder how many billions they can lose before bankruptcy. If they were a bank with private gain and public loss, I know the limit is infinite billions but for a company that is held to the rules of capitalism, bankruptcy can't be too far off for them now. Maybe companies should turn into banks where opening savings accounts and borrowing credit/mortgages is done in return for their products.
Everyone who posts about Sony's mistakes will be right. They have made so many they have a complete mess on their hands. With a share price below book value, there are massive write-downs to come. I expect they will be forced to bust themselves up and be sold off in pieces. Unfortunately, it will take so long to get to this point, the brand will have zero value -- perhaps it already does, I'm getting old.
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Oh dear Sony... maybe you shouldn't have been so arrogant all those years
Sony will hopefully push through here... love their Z series laptops and think they will make a good Ultrabook as long as they price it right and don't get greedy
just checked their website, their laptop range consists of: C,E,F,S,Y and Z series.... too much?