Sony announced plans today to cut 10,000 jobs across its global operations and axe 11 factories as part of a restructuring plan aimed at reversing a slump at the Japanese electronics icon.
The company will reduce its cost base by 200 billion yen ($1.8 billion) and sell or close 11 of its 65 manufacturing plants, Sony's new British-born chief executive Howard Stringer said as he presented a keenly awaited three-year business recovery plan.
Sony said it would focus on three core sectors - electronics, video games and entertainment.
'In particular the company is concentrating on the revitalisation of its electronics business through further structural reforms and promotion of a well-defined strategy,' the company said in a statement.
Sony also said today that it expects to post a net loss of 10 billion yen ($90m) in the year to March 2006 as it struggles to turn around a slump in sales.
The company blamed the profit-warning - its second this year - on one-off charges linked to its new restructuring plan. In July, after announcing a net loss of 7.3 billion yen for the three months to June, the company had downgraded it earnings forecast to a full-year net profit of 10 billion yen from the
previous estimate of 80 billion yen.
Though it is also known for movies and music, Sony, which brought the world the transistor radio, Walkman and PlayStation still relies on electronics for 70% of its $67 billion in annual sales.
But it is now lagging behind rivals such as Sharp and Panasonic brand-maker Matsushita in the television market and struggling to challenge Apple's lead in the market for digital music players.
Stiff price competition and loss of market share to rivals saw Sony post its first back-to-back quarterly loss in the three months to June and drastically slash its forecast for the year.
