Sony is set to cut 10 000 jobs, mostly in its electronics business, of which almost half will come from Japan, where it is headquartered and houses the majority of its operations and research centres.
Sony, which makes the PlayStation gaming console, is facing an extremely competitive business environment and has been undertaking a series of measures to "revitalise and grow" its electronic business.
As a result of its restructuring and job cuts, Sony expects to save about 30 billion yen (R3.3 billion) a year from the start of its 2014 financial year. The measures will cost it 75 billion yen - or around R8.1 billion.
Sony was established as Tokyo Tsushin Kogyo Corporation, in May 1946, and changed its name in January 1958. It listed on the Tokyo Stock Exchange, in December 1958, and the New York Stock Exchange, in September 1970.
Sony's stock last closed at $12.15 on the New York Stock Exchange and its shares have lost 73% of their value in the last five years. It has a market capitalisation of $12.2 billion, slightly below that of competitor Panasonic.
Taking steps
In its second quarter of the year - the latest results it has issued - the group reported revenue up 1.4%, but its net loss widened to 24.6 billion yen (R2.7 billion), from 15.5 billion yen - R1.7 billion - the previous year, below analysts' expectations. Its first quarter results were the first since it realigned its business segments.
Sony says the decline in its operating results was due to unfavourable foreign exchange rates and deterioration in its Mobile Products and Communications unit, which saw an operating loss of 28.1 billion yen - about R3 billion - from a profit of 1.6 billion yen a year ago, partially due to lower PC sales.
CEO Kazuo Hirai, who took over the company in April, has said the group needs to drive growth of its core electronics businesses and accelerate innovation. Sony's electronics unit includes digital imaging, smart mobile and gaming.
The group says it is consolidating certain manufacturing operations and expediting measures to reduce its headcount as it takes "additional steps" to speed up structural reforms at its headquarters and in its electronic operations in Japan.
In April, it announced mid-term strategic initiatives, which include "resource optimisation" to streamline the entire organisation, trim costs, and establish a firm foundation for sustainable future growth.
As a result of these measures, the group expects to trim as many as 10 000 jobs across the group by the end of March next year, the bulk of which will be in its electronic business. Between 3 000 and 4 000 jobs will be affected in Japan.
Its restructuring will include consolidating sales offices and "resource optimisation" in Japan, the US and Europe. Sony has also been taking measures, such as site consolidation, to better reflect the current scale of production, as well as steps to further enhance operational efficiency.
Factory consolidation
The company has 163 000 staff across the globe. Its major products include LCD televisions, video and still cameras as well as audio video equipment.
Sony's manufacture of interchangeable lenses and lens blocks, currently taking place at Sony EMCS's Minokamo site, will be absorbed by EMCS's Kohda site, both of which are in Japan.
In addition, as Sony concentrates its mobile phone business on the area of smartphones, the operations currently being carried out at the Minokamo site around mobile phones will be partially discontinued and partially transferred to Sony EMCS's site.
"As a result of this realignment, the Minokamo site is scheduled to close at the end of March 2013." The Minokamo site currently employs 840 staff members and mainly makes interchangeable lenses for digital SLR cameras, lens blocks and mobile phones.
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