Boston, MA 02/12/2014 (wallstreetpr) – Sony Corporation (ADR) (NYSE:SNE) has stepped up its efforts to turnaround the company’s unprofitable electronics operations, and is quitting the PC business, splitting the company’s Television division into a completely separate unit just as it has warned that steep losses are in the offing for 2014. The company said that as part of the restructuring, it will be axing 5,000 jobs and will also trim 100B yen per year from its fixed costs in the long-term.
Massive losses
Losses in Sony Corporation (ADR) (NYSE:SNE)’s TV business have for years been a ball and chain and it has kept the company from competing effectively with the other tech giants like Apple Inc (NASDAQ:AAPL) and Samsung Electronics Co., Ltd (KRX:005930). With restructuring costs on the rise at one end, the company’s core mobile and the home entertainment businesses also fall short of expectations, at the other. Sony Corporation (ADR) (NYSE:SNE) said that it now projects a net loss of 110B yen in the financial year that ends in March. Previously, the company had projected a net profit of 30B yen.
The divestitures
The job cuts that Sony Corporation (ADR) (NYSE:SNE) has planned will be in the TV and the PC divisions, and will be implemented by 2015 March. The company also said that all the related cost-savings will kick in by the fiscal 2015-2016. As has been widely expected, its Vaio PC division will be divested to Japan Industrial Partners, the investment fund that will set up as completely separate company and will then takeover operations. The company has not disclosed the financial terms of this sale but news has it that at the outset, Sony Corporation (ADR) (NYSE:SNE) will hold a 5% stake in that company. The company’s TV operations will also be spun-off into a different unit by 2014 July. The company is now making every effort to make a turnaround this year.
