- Title: JAPAN: Sony warns of 2.9 billion US dollar loss, steps up restructuring
- Date: 23rd January 2009
- Summary: TOKYO, JAPAN (JANUARY 22, 2009) (REUTERS) SONY HEADQUARTERS SIGN READING: "SONY" HOWARD STRINGER, CHIEF EXECUTIVE OF SONY, WALKING INTO A NEWS CONFERENCE (SOUNDBITE) (English) HOWARD STRINGER, CHIEF EXECUTIVE OF SONY, SAYING: "We're in the worst economic depression in my life time; economic recession, we're not supposed to call it a depression yes, but it feels depressing, and that's that's my primary responsibility and whereas we are anticipating a high profit in October, but we've obviously lost a lot. We have to move in a hurry and that's our responsibility and my training." REPORTERS LISTENING (SOUNDBITE) (English) HOWARD STRINGER, CHIEF EXECUTIVE OF SONY, SAYING: "In terms of our employees, clearly we have a very strong responsibility to treat our employees with great sensitivity as you suggest. A consolidating factories and so on and so forth. Many people around the world have lost their jobs and we are being very careful to apply the rules of all those countries including Japan." STRINGER AND SONY EXECUTIVES SITTING SONY SHOWROOM AT THE HEADQUARTERS/ BIG TELEVISION SCREEN READING: "SONY" SONY PLAYSTATION PORTABLES ON DISPLAY SONY PLAYSTATION 3 ON DISPLAY VARIOUS OF SONY COMPUTER VAIO ON DISPLAY SONY CAMERAS ON DISPLAY SONY CAMERA CHIBA, JAPAN (FILE) (REUTERS) SONY BOOTH AT COMBINED EXHIBITION ADVANCED TECHNOLOGIES (CEATEC) EXPO SIGN READING: " SONY" SONY TV MONITORS ON DISPLAY SONY TV MONITOR ON DISPLAY TRUCK DRIVING OUT OF A SONY FACTORY VARIOUS OF SONY EMPLOYEES WORKING AT THE FACTORY MACHINES MAKING SONY PRODUCTS MORE OF SONY EMPLOYEES WORKING SONY FLAG
- Embargoed: 7th February 2009 12:00
- Keywords:
- Location: Japan
- Country: Japan
- Topics: Industry
- Reuters ID: LVA9PJT3GTM65BQCJG02I7P15OM6
- Story Text: Consumer electronics giant Sony Corp warned on Thursday (January 22) that it would post a record 2.9 billion US dollar annual operating loss due to sliding demand and a stronger yen, and unveiled fresh restructuring steps to revive its ailing electronics operations.
The operating loss will be Sony's first in 14 years, underscoring deepening troubles for a company that has fallen behind Apple Inc's iPod in portable music, Nintendo in videogames, and is losing money on flat TVs.
"We're in the worst economic depression in my life time; economic recession, we're not supposed to call it a depression yes, but it feels depressing, and that's my primary responsibility, whereas we are anticipating a high profit in October, but we've obviously lost a lot. We have to move in a hurry and that's our responsibility and my training," Sony's Chief Executive Howard Stringer told a news conference at the company's headquarters in Tokyo.
Sony said it now expects an operating loss of 260 billion yen (2.9 billion US dollars) for the year to March, down from an earlier projection for a 200 billion yen profit and far worse than earlier media estimates of a loss of 100 billion yen.
The maker of Bravia LCD TVs and PlayStation game consoles said it would respond by accelerating restructuring, more than doubling a cost-cutting target for the year to March 2010 to 250 billion yen.
Sony said it would end TV production and design operations at one plant in Japan and consolidate those operations into another factory in the country.
It plans to cut headcount by 30 percent in operations related to TV design worldwide.
Other measures include consolidation of resources for batteries and small and mid-size liquid crystal display (LCD) panels, and pay cuts for directors and managers.
It expects restructuring charges to total 170 billion yen through the year to March 2010.
Last month, Sony outlined a restructuring plan that included curbing investment, closing five to six plants and cutting a total of 16,000 regular and contract jobs globally to save 100 billion yen a year in costs.
"In terms of our employees, clearly we have a very strong responsibility to treat our employees with great sensitivity as you suggest. A consolidating factories and so on and so forth," said Stringer.
"Many people around the world have lost their jobs and we are being very careful to apply the rules of all those countries including Japan," he added.
Sony's management faced criticism from some analysts and investors who said more drastic measures were needed to streamline a sprawling empire that includes semiconductors, movies and insurance.
Sony attributed 340 billion yen of the 460 billion yen swing in its operating forecast to its core electronics division, as the slowing global economy depresses demand for its digital cameras, video recorders and flat TVs.
But it has also been hurt by the slide in the Japanese stock market, which sliced into the value of securities held by its financial unit. Slower sales in its game and movie divisions have also hit its results.
Illustrating the problems Sony faces, Japanese exports plunged 35 percent in December from a year earlier, with electronics sales to China and other parts of Asia among the worst affected as Western orders to Asian assembly plants dry up.
The yen rallied nearly 20 percent against the dollar last year and hit a 13-year high of 87.10 yen on Wednesday (January 21).
Sony is not the only electronics maker suffering.
Rival Samsung Electronics this month reorganised itself into two major groups in response to the global downturn, while Panasonic has also cut its outlook and stepped up restructuring measures.
Sony's shares closed down 2.6 percent at 1,938 yen ahead of the revision, underperforming a 1.9 percent rise in the benchmark Nikkei average. - Copyright Holder: REUTERS
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