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Sony will axe 10,000 jobs in shake-up

CEO plans to revitalise the firm
Thu Apr 12 2012, 11:45

NEWLY APPOINTED Sony CEO Kaz Hirai has revealed plans to turn around the company's fortunes, which as expected include 10,000 job cuts.

Earlier this week news leaked that Sony plans to cut six per cent of its global work force, news that Hirai this morning confirmed as he promised to revitalise the company.

The company said, "Sony estimates that the headcount across the entire Sony Group will be reduced by approximately 10,000 in FY12."

"By implementing a rapid decision-making approach that draws on the strengths of the entire Sony Group as 'One Sony' Sony aims to revitalize and grow the electronics business to generate new value".

Following a revised forecast of an annual loss of $6.4 billion for 2011, Hirai said the company will focus on three main areas throughout 2012 - digital imaging, games and mobile devices. He hopes this new strategy will help generate sales of six trillion yen and a profit margin of five per cent.

Regarding its digital imaging business, Sony said that it plans to extend its technologies across a wide range of business applications, hinting that it might even delve into the medical sector. With gaming, the Japanese company said that it will expand the number of titles available through the Playstation Network (PSN) and Playstation Suite, although it's remaining quiet on what we can expect from it in mobile gaming, saying only that it will "launch new mobile products and establish new business models".

Paul O'Donavon, principal analyst at Gartner commented on Sony's restructing plans, saying, "The announcement of massive losses at Sony and more restructuring and job losses, does not come as any real surprise."

"Sony lost a lot of market share across a number of its core market such as portable audio, TVs, game consoles for lots of different reasons. This was its real major problem. Too many businesses, too many global issues and a fixation on trying to keep its profits as high as it could, regardless of losing market share against cheaper competitors that were and still are offering pretty much the same or even better quality products than Sony."

"This led to Sony suffering massive loss of brand equity in the market against other companies such as Samsung, LG, Apple and others which it has never recovered from."

It's been a tough week for Kaz Hirai, who took over as Sony CEO from Howard Stringer earlier this month. While it's good to see that he's not shying away from difficult decisions, we can't help but think that we've heard all this before. µ


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