Sony revealed the considerable changes it has in store, changes that it hinted at when it brought in U.K. native Howard Stringer to its top executive post earlier this year.
Today Tokyo-based Sony Corp. announced a number of what it dubbed "structural reforms" to its electronics business, including the axing of 10,000 jobs -- about 7 percent of its entire work force -- with the goal of revitalizing said electronics business and saving $1
.8 billion (200 billion yen) in costs by the end of fiscal 2007. The company also set the goal of achieving consolidated sales of more than $71.9 billion (8 trillion yen) for the entire company and an operating profit margin of 5 percent, with electronics achieving a market of 4 percent, by the end of that period.Sony promised to give quarterly reports on the progress of the restructuring. While it said it will close a number of plants and facilities, it didn''t offer specific details. In the short term, the changes will have an impact on the company''s bottom line, the company warned.
The company also revised its forecast for the current fiscal year, which ends March 31, 2006, stating that it now expects a net loss of approximately $89.8 million (10 billion yen). The company had originally anticipated net income of about that much, but as a result the plans unveiled today, the restructuring charges included in its projected operating income grew 59 percent from that original forecast to an estimated $1.3 billion (140 billion yen)
As part of the initiative Sony said it was significantly reorganizing its electronics group to place centralized decision-making authority over key areas under its Electronics CEO. This abolishes the current company system and assures coordination and focus across newly-defined business groups, the company said.
Rigorous horizontal coordination in key areas: product planning, technology, procurement, manufacturing, and sales and marketing, will allow rapid and streamlined decision making across product lines, according to Sony. The moves will also promote uniform software development that will assure seamless interoperability between its products, eliminate design and product redundancies, and assure decisive and rational R&D planning and spending, the company claimed.
As for its growth strategy going forward, Sony said it would devote resources to its high definition display hardware, mobile products and semiconductors and key component devices that can differentiate its products. The company also said it was creating a division specifically to promote the development of Cell processor-related technology, products and applications, which will report to Sony''s CEO, Stringer
