TOKYO Sony Corp. will slash 10,000 jobs worldwide by March 2008, and said it will close several factories as part of a major restructuring program. The struggling consumer electronics group also slashed its forecast for its current financial year.
New chief executive Sir Howard Stringer told analysts on Thursday (Sept. 22) in a much anticipated mid-term strategy review that the company would downsize or dispose of 15 unspecified, business lines, reduce the number of models in certain categories and close 11 factories, leaving just 54 plants.
"Without a question, the revitalization of the electronics [business] is our No. 1 priority," Stringer said.
For the last five years, Sony's "electronics business has been hitting the wall, and this fiscal year it will fall in the red," added Ryoji Chubachi, Sony's president and electronics CEO.
The restructuring plan is likely to disappoint some investors and analysts who had been anticipating a more ambitious and detailed program from Stringer, who took over at Sony in March.
Stringer had previously signaled that the focus of any new plan would be turning around Sony’s core electronics division. However, the announcement failed to shed light on whether the group would spin off or divest non-core businesses and how it would bring greater focus to electronics operations.
The job cuts represent about 6.5 percent of the Sony’s global workforce. Four thousan would come from Japan and 6,000 from other regions.
Sony said it expects to cut costs totaling ¥200 billion ($1.8 billion) over the next three years, much of which will come from plant closings, but it also hopes to raise ¥120 billion ($1.2 billion) from the sale of real-estate assets.
The company also said it expects an operating loss of ¥20 billion ($180 million). It previously indicated that annual operating profits would be ¥30 billion ($270 million).
It now expects operating losses for the third consecutive year from its electronics division, its largest operating unit.