Sony Corp. is considering to deal with its two most troubled units. The company announced that it intends to cut 5,000 jobs in its television and personal-computer businesses, and the TV unit will be reorganized into a separate subsidiary.
Sony Corp. made an official announcement, explaining it expects a loss estimated to 110 billion yen (1.1 billion dollars) for the full year through March. This is an annulment of a previously projected 30-billion-yen profit. The company also revealed that its PC business is to be sold, which confirmed earlier reports.
Kazuo Hirai, Chief Executive Officer of Sony Corp., explained that taking into account the television and personal-computer moves the company is taking, the major part of its reorganization process is now complete. Mr. Hirai also said that the company is now left free to become more focused on expanding its more promising businesses.
The Wall Street Journal cited CEO Kazuo Hirai, who said at Sonys earnings news conference: “I hope this puts a period to structural reforms of this scale. But with competition increasing, we need to constantly review and reshuffle our business portfolios.”
According to Sony, its forecast for a full-year loss is to blame on 690 million dollars in charges for restructuring the companys TV and PC units. These moves include 1,500 job lay-offs in Japan and another 3,500 ones overseas by March 2015. Roughly 146,000 people were employed by the company worldwide in March 2013, the end of its previous fiscal year.
The expected loss is considered particularly sharp due to the fact Sonys peers have projected high and even record profits for the year. Mr. Hirai confirmed earlier reports that Sony plans to sell its Vaio PC business to Japan Industrial Partners Inc., a decision he described as “agonizing”.
However, the decision for a split-off of the companys TV business was a quite unexpected step, and it is considered very similar to the one it took with its mobile-phone and PlayStation videogame units. The company explained it anticipates to post losses from its TV business, totaling 25 billion yen. This would be its tenth consecutive year of losses.
As reported by Bloomberg, Sonys Chief Executive Officer said the company is having “various discussions” about the future of TV sets, but emphasized there is no plan to sell the business now.
Sony Corp.s shares rose by 4.13% on Friday in Tokyo to settle at JPY 1 691.
Prices settled 3.90% higher at $16.52 per share in New York on Thursday. According to CNN Money, the 17 analysts offering 12-month price forecasts for Sony Corp have a median target of $17.74, with a high estimate of $31.36 and a low estimate of $13.61. The median estimate represents a +7.36% increase from the last close.
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