TOKYO: Sony yesterday warned it would book a $1.08bn annual loss and cut 5,000 jobs while exiting the stagnant PC market this year as the once-mighty electronics giant struggles to reinvent itself in the digital age.
The shock news comes a week after Moody’s downgraded the firm’s credit rating to junk, saying the maker of Bravia televisions and the PlayStation games console had more work to do in repairing its battered balance sheet. It also comes as Japan’s embattled electronics sector faces serious challenges from foreign rivals such as US giant Apple and South Korea’s Samsung.
Sony said the job cuts would save about $1.0bn a year starting from early 2015 as it announced the sale of its Vaio-brand PC division to a Japanese investment fund. It did not disclose financial details of the deal with Japan Industrial Partners (JIP), but local media this week reported that the sale was worth between 40bn yen ($400m) and 50bn yen.
Citing “drastic changes” in the global personal computer market, Sony said it had decided to concentrate on “its mobile product lineup on smartphones and tablets and to transfer its PC business to a new company established by JIP that will enable (its) continuation”. It would “cease planning, design and development of PC products”, Sony added.
The job losses — about 1,500 in Japan and 3,500 overseas — were tied to its ailing television and PC businesses, it said.
Several hundred Vaio employees are expected to be rehired by its new owner and Sony said it will “explore opportunities for other employees to be transferred to other businesses within the Sony Group”. For others, Sony said it planned to offer an “early retirement support programme”.
Sony has pinpointed digital imaging, videogames and mobile as the core units that it hopes will lead a turnaround in its electronics business. AFP
