Things are looking bleak for Sony Corporation (TYO:6758) (NYSE:SNE). Kazuo Hirai, the company’s chief executive and president just announce their plans to cut back 10,000 jobs. This effort is to save the company from further financial losses.
On Thursday, Sony released a press release that announced their upcoming changes for the company. Such changes include strengthening their main businesses (namely their gaming, mobile, and digital imaging businesses) and revamping their television business. The release further elaborates their goals to earn 6 trillion yen with the operating margin of 5% in electronics, earn sales of 8.5 trillion yen with the operating income that’s over 5%, and a return on equity of 10% for the whole company. They want it all by the fiscal year end of March 31 2015. The company’s other significant goals include branching out businesses in up-and-coming markets, most particularly those in Mexico and India, and creating other technology products for the medical industry.
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Hirai replaced the former CEO replaced the former chief executive Howard Stringer earlier this month. He announced that his goal for the company was to make changes while strengthening the company’s most successful businesses, and revamping their business portfolios.
It sounds like their ultimate goal is to focus on the company’s strengths and to build on that. Two months ago, Sony predicted a net loss of 220 billion yen, but last Tuesday they re-estimated that amount to 520 billion. The reasoning behind this was the additional increase in taxes of 300 billion yen.
Sony’s most successful products currently in the market include the Sony Playstation, Blu-Ray disc players, and VAIO laptops. They also have businesses in movies, music, mobile phones, and financial services. It’s a large company that has a lot going for it but their main goal right now is to stay afloat.
Sony has a smart plan for the future, but it’s sad that they have to cut 10,000 jobs in the process.