Sony Expects Massive Loss and Announces Restructuring

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Sony has dramatically reduced its financial expectations for its fiscal year ending March 31, 2009. Previously, Sony estimated net income for the year of ¥150 billion (approximately $1.7 billion), but now expects a net loss of ¥150 billion. Sony also confirmed certain restructuring plans, involving substantial reductions to its electronics manufacturing business (not its game business).
The dramatically revised income expectations come from lower sales due to the "global economic slowdown, the continued appreciation of the yen, the impact from the decline in the Japanese stock market and an increase in expected restructuring charges." Sony revised the performance of its game unit downward by ¥30 billion, half of which Sony blames on the appreciation of the yen, and half of which the company blames on the global economic problems.

Because of its difficulties, Sony expects to incur ¥170 billion of charges for restructuring to save an estimated ¥100 billion annually by 2010. This will take the form of closing manufacturing operations, outsourcing and reducing global headcount. Impressively, Sony is also working to reduce executive compensation, but will also be pursuing early retirement offers (and straight-up firings).

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This page contains a single entry by Editor published on January 22, 2009 11:19 AM.

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