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Business

Sony to spin off TV operations

TOKYO -- Sony will sell its personal computer operations and spin off the TV segment under a sweeping restructuring plan that involves cutting 5,000 jobs worldwide, the company said Thursday.

     The Japanese firm hopes to revive its troubled electronics business by streamlining core operations and pouring more resources into smartphones and game hardware.

     Massive restructuring charges, coupled with sluggish sales, will push the firm into a consolidated net loss of 110 billion yen ($1.07 billion) for the current year ending March 31, its first red ink in two years.

     The PC business, known for its Vaio brand, will be transferred to a new firm under a deal to be finalized with investment fund Japan Industrial Partners by March 31. Sony will quit PC development and will also exit sales after the spring season.

     Sony will take a 5% stake in the new company to be created by Japan Industrial Partners. The private equity fund, specializing in business turnarounds, also decided last month to purchase the Biglobe Internet service provider from NEC.

     The TV business will be spun off around July. The segment was seen swinging to the black this fiscal year. But weak emerging markets have taken a toll, and now a 10th straight annual loss is expected. With the spin-off, the business will reduce staff and overhaul its pay system to cut fixed costs. By adopting speedier decision-making and offering products tailored to emerging markets, it will aim to return to profit in the year ending March 2015.

     Sony, which has a groupwide workforce of around 146,000, plans to eliminate 1,500 jobs at home and 3,500 workers abroad. A manufacturing subsidiary that operates five domestic factories has started to solicit early retirement, and administrative staff at the parent will also be downsized.

     For this fiscal year, impairment losses are expected to reach 8.2 billion yen from the sale of the PC business and other asset write-downs, in addition to more than 10 billion yen in losses for personnel reductions. In all, structural reform expenses will total 70 billion yen, an increase of 20 billion yen from earlier plans.

     Profit growth at Sony's financial and music businesses exceeded 30% for the April-December period, but this was not enough to offset the money lost by the electronics business. The company now sees overall operating profit falling 65% from the previous year to 80 billion yen in the current fiscal year, some 90 billion yen short of an earlier forecast.

(Nikkei)

 

 

 

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