For the last four years, Sony’s failed to make a profit. Sony’s new CEO Kazuo Hirai – formerly the company’s PlayStation Boss – wants to change that, and in order to make the company profitable again will be heavily restructuring the Japanese mega-corporation.
Good news for Sony, but terrible news for its employees – 10 000 of which are expected to be handed pink slips within the next year.
This is according to a sobering report by the Associated Press which cites numerous Japanese reports. Sony’s woes are largely down to their shrinking TV business and their betting the farm on 3D – which while growing, has yet to take of as they’d hoped. Sony’s once mighty “Bravia” name has also fallen out of favour with the public. As part of the new restructuring, Sony will merge its LCD panel business – which it used to operate with the now much larger Samsung – with Toshiba and Hitachi. It’ll also be selling off its chemical business.
The company’s blamed "deterioration in market conditions in developed countries" and "unfavourable foreign exchange" along with the floods in Thailand – home of many of its factories – for its financial woes.
It’s hard to imagine that Sony – one of the largest names in electronics – could be in such dire financial straits, but it’s unfortunately quite true. In its latest financial report Sony has estimated it’ll make a staggering loss of 520 Billion Yen – or $6.4 billion - this year – nearly double the expected loss.
It’s for this reason I don’t expect Sony to unexpectedly release a new console any time soon; they’ve just released the Vita and the financial knock of another console launch – which are typically loss leaders – could just bring the company to its knees.