Hire Wire Apr 09 2012

Sony to Cut Estimated 10,000 Jobs

By daisuke wakabayashi

Sony Corp. plans to reduce its work force by an estimated 10,000 jobs, or roughly 6% of its global total, as part of a broader restructuring plan by Chief Executive Kazuo Hirai, people familiar with the matter said Monday.

The cuts could be made over the next two fiscal years, ending in March 2014, though the timing hasn't been settled, the people said. The potential cuts were the first details to emerge of Hirai's restructuring plan since he succeeded Howard Stringer as CEO this month. The plan is expected to be announced at a corporate strategy meeting on Thursday.

Hirai is focusing on turning around an electronics business that has had four straight years of losses. The operation once was responsible for Sony's reputation for innovative products, but in recent years it has failed to match the success of Apple Inc. and Samsung Electronics Co. and has suffered from a strong yen and brutal price competition.

For two months, Hirai has been searching with deputies for ways to streamline the company without wrecking product pipelines that could deliver innovations, the people said.

A large part of the payroll reduction would come from selling or spinning off businesses that aren't core to the company, the people said. Sony has said that the disposal of two businesses that already have been announced could cut as many as 5,000 jobs. Sony last month said it reached a deal to sell its chemical-products business to the Development Bank of Japan. Sony also split off its unit that makes small and midsize liquid crystal displays to Japan Display Inc., a new government-backed venture of Sony, Toshiba Corp. and Hitachi Ltd.

Further cuts are expected in the television-set division, where Sony is forecast to lose money for an eighth straight year, the people said. Last year Hirai, then in charge of Sony's TV-set business, scrapped a goal of selling 40 million sets a year. Instead, he decided to target annual sales of 20 million units and adjust the size of Sony's TV-sales operations, the people said.

The restructuring will be the company's second major overhaul in four years. In late 2008, during the global financial crisis, Stringer axed 16,000 jobs and closed factories. As of March 2011, Sony had 168,200 employees world-wide.

Messrs. Stringer and Hirai and five other executive officers are expected to forgo their bonuses for the fiscal year that ended in March, the people said.

Sony's plan to reduce its work force was first reported by Japan's Nikkei newspaper on Monday.

In a sign of the importance of the TV-set operations, Sony last month unveiled a organizational chart that eliminated a layer of management between the head of the TV business and the CEO so Hirai could oversee the division directly.

Last week, Hirai pledged to spread cutting-edge technologies from its professional products to more mass-market products. One example was Sony's 4K technology, a display and imaging method for presenting moving images four times sharper than existing high-definition video.

Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com



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