Sony announces massive restructuring plan costing $925m, 10,000 job losses confirmed

Sony logoThe last few years have been, to put it mildly, something of a struggle for Sony, with revenue plummeting due to an increasingly competitive marketplace.

In Tokyo on Wednesday, the company’s newly appointed CEO and president Kazuo Hirai presented plans which he believes will help lift the company out of the doldrums to bring it the kind of success to which it was once accustomed. With losses for the last fiscal year expected to hit $6.4 billion, the Japanese electronics company certainly has its work cut out.

Hirai’s ‘One Sony’ restructuring plan includes the reduction of its workforce by 10,000 — about 6 percent of its global workforce — with a statement from the company explaining that the number “includes employees expected to transfer outside the Sony Group as part of the sale of businesses.”

In a bid to get the company back on track, Sony said it intends to strengthen its core businesses, which include its digital imaging, gaming and mobile sectors. It hopes that by 2014 combined sales in these three areas will account for 70 percent of the total sales of its entire electronics business.

The company announced its intention to go on delivering “exhilarating entertainment” with its PlayStation 3 and PlayStation Vita systems, with plans to boost revenue by increasing the number of downloadable game titles available through its PSN platform.

It also said that with regards to its digital imaging sector, it plans to push harder in developing image sensors, signal processing technologies and lenses, and intends to take its technologies to a wider range of businesses from security to medical.

So that it can quickly develop and deliver mobile products to market, Sony said it would be integrating various operations in this part of its business.

To turn around its beleaguered television business, the Japanese company will, for example, reduce the number of models it offers by 40 percent this year and improve design engineering efficiency. It believes it can get its television business back in the black by March 2014.

It also said it intends to “aggressively” promote innovation, and will further expand its business in emerging markets, which includes countries such as India and Mexico.

The restructuring is expected to cost Sony around 75 billion yen ($925 million).

Desperate measures for desperate times, the recently-appointed Hirai has hit the ground running. Now we must wait to see if his plans put Sony back in the driving seat and enable it to compete successfully with the likes of Apple and Samsung, or whether its best days are now behind it.