Sony is the latest tech company to join the long list of firms that have been hit hard by the recession; the Japanese giant has announced, via its current CEO Sir Howard Stringer, that it expects a loss of up to $2.9 billion for the year, four times what analysts had estimated.
Some of the company's top executives, including the CEO himself, will not take any bonuses for the forthcoming year; the (small) step comes as the company reduces its headcounts, slashing the number of jobs by more than 16,000.
In addition to reducing its total number of employees to under 170,000, it will also close 6 of its 57 factories worldwide in a bid to reduce its expenses by 100 billion yen. This comes on a revised annual sales forecast down by $15 billion.
Stringer has also committed Sony to further restructuring plans, including encouraging some full time staff to take early retirement packages and outsourcing TV production and software development to India.
Sony's revenues have dived significantly from 9.9 trillion yen to 7.7 trillion yen, in contrast to its rival Apple which has been recording one of its best quarters yet.
Arguably, the fact that Sony products are almost always the most expensive in any given market does not help plus the relative strength of the yen vis-a-vis the Euro, the Pound and the US Dollar makes the situation a bit more complicated.
Sony is expected to sell 15 million Bravia TVs, down by 6 percent, 21.5 million Cybershot cameras, down by 9.5 percent, Vaio PCs and laptops, down 16 percent while Playstation 3 gaming consoles remained unchanged.
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Sony needs to diversify like Sanyo, Sharp and Panasonic. It has already given up on mobile phones by creating the Sony Ericsson Joint Venture. Its inability to tackle Apple products with more convincing and innovative products has been a huge letdown for fans of the brand. The Walkman brand now is now worth significantly less than the iPod in most markets. According to Google Trends, the term iPod was 38 times more likely to be searched than Walkman. As one punter put it, you can cut workers, but Sony's products still won't sell.
(All Headline News)
(Times of India)