To stem massive losses, Sony ( IW 1000/33) on April 12 said it would cut about 10,000 jobs and spend nearly $1 billion on restructuring. New chief Kazuo Hirai said revamping the firm would cost 75 billion yen (US$925.7 billion) this fiscal year, just days after it warned of a record annual loss -- its fourth consecutive year in the red.
Hirai said he would aim to make the firm's struggling television unit profitable within two years by slashing costs and boosting the image of its Bravia television brand, a business he described as part of Sony's make-up.
"Now is the time for Sony to change," said Hirai, who replaced chief executive Howard Stringer earlier this year. "What is urgent is that we strengthen our core businesses while rebuilding our TV business... television is in Sony's DNA."
In addition to the job cuts, which account for about 6% of Sony's total workforce, the reforms include expanding its PlayStation and online games business, pushing further into emerging markets and eyeing new markets, such as the medical equipment sector.
The firm said it was aiming for 8.5 trillion yen in revenue by 2015.
"We must accelerate the speed of our management, reform our business portfolio, and innovate," Hirai said. "Our goal at Sony is to become a company that creates products and services that stimulate curiosity in customers around the world and gives them an emotional experience."
Sony warned earlier this week it would post a record full-year loss of 520 billion yen (US$6.4 billion), more than five times its 90 billion yen loss prediction in November.
Japan's electronics giants have suffered in recent years, particularly in their television business as stiff competition has sent prices tumbling, while the effects of the strong yen and a stuttering global economy have also hit sales. The firm was forced in December 2008 to slash 16,000 jobs worldwide as it came under pressure amid tumbling demand during the global financial crisis.
Last month, Sony announced the sale of its chemical division to the Development Bank of Japan, saying the unit did not fit with its revamp. The division, which has several thousand employees, accounts for only a small fraction of Sony sales, but the move was widely seen as the first of many changes aimed at reshaping the company.
Last year, Sony agreed to sell its stake in a joint liquid crystal display panel venture in South Korea to its partner Samsung Electronics, which the Japanese firm on Thursday said meant "panel-related cost reductions."
Sony also said last year it would buy out its Swedish partner in mobile phone joint venture Sony Ericsson, giving it full control over its increasingly vital handset business.
Industry analysts have said Sony must usher in major reforms to counter fierce overseas competition and weakness in its TV unit, although it still generates substantial profits from electronics parts.
Sony has blamed tough competition, falling prices, slow demand, the impact of severe flooding in Thailand last year, and the high yen among the reasons for its weak balance sheet.
Credit rating agencies Moody's and Standard & Poor's both downgraded Sony earlier this year.
Copyright Agence France-Presse, 2012