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© kheng-guan-toh-dreamstime.com Electronics Production | February 06, 2014

5000 to lose their jobs as Sony refocus

Sony is undergoing some massive changes at the moment. The company has decided to rid its PC business and focus its mobile business on smartphones and tablets, as well as shifting its focus within its TV business. Something that will result in 5'000 employees losing their jobs
Sony is taking significant measures to improve the company's growth within its electronics business. Since spring last year, the company has been implementing a reform strategy across its electronics business. Imaging, game and mobile businesses, three markets that Sony identified as core businesses which would drive the growth of its electronics business. And Sony company has made significant progress in executing this strategy.

At the same time, PCs and Tvs were identified as businesses where profitability improvement would be a key priority and imitated various reform measures. However, despite the company's efforts, the target of returning the TV and PC businesses to profitability within the fiscal year ending March 31, 2014, will not be achieved.

As a result, Sony is now also taking further steps to address reform of the PC and TV businesses, while at the same time moving forward with further optimisation and streamlining of its manufacturing, sales and headquarters/indirect functions, and concentrating resources in growth businesses.

The PC Business

Sony and Japan Industrial Partners Inc. ("JIP") have entered into a memorandum of understanding confirming Sony's intent to sell to its PC business – currently operated under the VAIO brand – to JIP.

As a part of the business transfer to JIP, Sony will cease planning, design and development of PC products. Manufacturing and sales will also be discontinued after the Spring 2014 lineup to be launched globally. Approximately 250 to 300 Sony Corporation and Sony EMCS Corporation employees involved in PC operations, including planning, design, development, manufacturing and sales, are expected to be hired by the new company established by JIP.

Sony will also explore opportunities for other employees to be transferred to other businesses within the Sony Group.

The TV Business

Sony has been engaged in various cost reduction initiatives for the TV business. These initiatives include enhancing LCD panel-related cost efficiency and rationalising R&D expenses, while also strengthening product competitiveness and operational efficiency in order to improve marginal profit ratio. Due to these measures, losses from the TV business have been reduced.

Cost reductions and Layoffs

In light of the TV business' continued importance within Sony's overall strategy, the Company has decided to execute the additional reform measures.

Sony plans to optimise the scale of the manufacturing, sales, and headquarters/indirect functions that support these businesses.

In terms of electronics sales companies, Sony plans to identify focused product categories for each specific country and region, rationalise support functions, and proactively implement outsourcing and other efficiency measures with the objective of achieving total cost reductions of approximately 20% by 2016.

With respect to manufacturing sites, Sony will proceed with the further optimization of manufacturing and other operations.

Due to the implementation of the measures across Sony's TV and PC businesses, and its manufacturing, sales and headquarters/indirect functions, Sony is anticipating headcount reduction of approximately 5'000 (1'500 in Japan, 3'500 overseas) by the end of fiscal year ending March 31, 2015 (FY14).
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