Sony is planning a companywide restructuring that will result in the loss of 10,000 jobs and the closure of 11 plants, among other changes, the electronics giant said Thursday.
The company known for its Walkman music player, the "Spider-Man" movie franchise and the PlayStation game console will "eliminate the corporate silos" of its Sony Corporation Network starting Oct. 1 and replace it with a new structure that it hopes will allow for better coordination on product planning. Centralized decision-making authority over key areas will go to president and electronics CEO Ryoji Chubachi.
Howard Stringer, CEO, Sony
The company, which has been facing financial losses and pressure from Samsung's LCD and plasma televisions and Apple Computer's iPod, said it expects to spend $1.8 billion on the restructuring. The company will be refocusing its efforts on electronics, televisions, digital imaging, DVD recorders and portable audio.
Because of the changes, Sony will report a financial loss of about $90 million on sales of about $65.1 billion for the year, the company said. Sony previously said it would post a profit of $90 million.
Chief executive Howard Stringer, Chubachi and chief financial officer Nobuyuki Oneda outlined the details of the changes during a meeting with management and key partners in Tokyo. Stringer admitted past missteps by the struggling electronics group but pledged a change.
"We have made promises before, but we failed to execute them," Stringer said at an afternoon news conference in Tokyo. "We must fight like the Sony warriors that we are."
News.context
What's new: Faced with financial losses and pressure from Samsung's LCD and plasma televisions and Apple Computer's iPod, Sony is streamlining its businesses into five groups that will focus more on electronics, televisions, digital imaging, DVD recorders and portable audio.
Bottom line: CEO Howard Stringer is throwing out Sony's traditional corporate structure in favor of one that, it's hoped, will allow for better coordination on product planning.
The job losses had been expected. Sony, the world's second-largest consumer electronics maker, said earlier this month that it would unveil a new strategy to reallocate resources, suggesting it would look to trim its product lineup or downsize poorly performing businesses.
The 10,000 positions to be eliminated represent about 7 percent of Sony's global work force. The company said it will slash 4,000 jobs in Japan and 6,000 jobs elsewhere by 2008.
Sony said its new structure will include five business groups, two units and one division. In addition, two development groups are being established as part of the restructuring.
The five business groups will focus on TV, video, digital imaging, audio, and what Sony calls "B&P"--broadcast and professional products.
Television is of the utmost importance to Sony, as it hopes for a turnaround by the second half of fiscal year 2006. The company has shelved its production of cathode ray tube, or CRT, television sets and will now focus on selling LCD and rear-projection TVs.
Rivals such as Samsung, Panasonic owner Matsushita Electric and Sharp will keep the division on its toes, but executives said the group will be profitable by rethinking its manufacturing sites, increasing the number of Sony-made components and putting its engineering functions under one roof.
The company's two business units will include its Core Component Business Unit, which oversees its production of its flash-based memory sticks, and its Semiconductor Business Unit, which includes its Cell microprocessor, which Sony co-developed with IBM and Toshiba.
Responsibility for Sony's PC and laptop computer Vaio line will remain with Yoshihisa Ishida, the head of Sony's lone corporate division.
As for research and development, Sony said it will split the work between its Technology Development Group and its Display Device Development Group. One focus will be improvement to Sony's self-luminous flat-panel OLED (organic light-emitting diode) displays, which have been in production for a year.
In looking at its prime opportunities for growth, Sony said it will focus on high-definition technologies, devices related to Blu-ray, mobile products and devices that can control a wide range of home electronics products. The company said it will also bolster its software development, including its middleware, applications, codec and digital rights management technology.
Sony also said that its Communication Network is still on track for an IPO for this fiscal year but that a previously disclosed IPO plan for its financial services division has been postponed until fiscal year 2007 or later.
Sony has already slashed about 20,000 jobs in recent years, most of those in Sony's loss-making electronics division, as part of a restructuring initiative, called "Transformation 60." That three-year plan is expected to wrap up at the end of March 2006.
yep, sony, there's the ticket. that'll surely endear you to the legions of electronics consumers who've abandoned your products because of ill-conceived, proprietary technologies!
That's a great idea...tell your employees that they are great warriors, and then fire 10,000 of them. Cannon fodder is more like it. And I'll bet that none of that 10,000 is from China or India.
Chamtech's spray-on antenna uses a nano material to provide a low-power boost to antenna range. The wireless-in-a-can product may some day bring an end to unsightly cell towers.
Whether Apple will release a new iPad next month doesn't seem to be the question as much as what day it will happen. A new rumor has it down to the day.
Tommy Jordan, the man who shot his daughter's laptop for YouTube, gets a visit from police and child protection services. Oh, and Good Morning America.
Along with green-lighting Google's buy of Motorola, the Justice Department today OKs an Apple-Microsoft-RIM partnership deal to buy Nortel patents, and Apple's plan to acquire Novell patents.
EnerG2 opens a plant to make an engineered carbon that will improve performance of energy storage devices and make storage for start-stop hybrid cars less expensive.
"Never Stop Playing" campaign for upcoming portable marks Sony's largest platform launch marketing spend, with ads to reach YouTube, Facebook, TV, and billboards in major cities.
As UC Berkeley students, the co-founders of "Back to the Roots" discovered they could grow mushrooms using recycled coffee grounds. Now their mushroom kit sells at grocery stores across the country.
CEO Howard Stringer is throwing out Sony's traditional corporate structure in favor of one that, it's hoped, will allow for better coordination on product planning.
mark d.
I stopped buying Sony products years ago, still laughing at their so called "iPod Killer".