Sony will split TV division into separate unit
Sony Corp stepped up efforts to turn around its unprofitable electronics operations, quitting the personal computers business and splitting its TV division into a separate unit as it warned it expects steep losses this year.
The Japanese company said on Thursday the restructuring will cut 5,000 jobs and trim 100 billion yen ($988 million) a year from fixed costs in the longer term. Losses in the TV business have long dogged its efforts to compete with global consumer electronics giants like Apple Inc and Samsung Electronics Co.
With restructuring costs rising at the same time as core mobile and home entertainment businesses fall short of its expectations, Sony said it now forecasts a net loss of 110 billion yen ($1.1 billion) in the fiscal year ending in March. It previously expected a net profit of 30 billion yen.
The job cuts, which will come in both TV and PC divisions, are to be implemented by March 2015. The cost savings are to kick in by the 2015-2016 financial year, Sony said.
Sony said the Vaio PC division, as widely expected, will be sold to investment fund Japan Industrial Partners, which will set up a separate company to take over the operations. Financial terms of the sale weren't disclosed, but Sony will initially hold a 5 percent stake in that company.
The TV operations will be spun off into a separate unit by July 2014, Sony said.
Having last turned an annual operating profit in the 12 months ended March 2004, Sony's TV business piled up losses of 761.9 billion yen ($7.5 billion) in the nine fiscal years before the current one. Sony officials on Thursday said they expect to lose another 25 billion yen on TVs this year.
Buoyed by a strong performance in its financial services unit in the October-December quarter, Sony posted an operating profit for the three months of 90.3 billion, up from 46.43 billion yen a year earlier. That was above a consensus forecasts of 71.9 billion yen, the average of estimates from six analysts surveyed by Thomson Reuters I/B/E/S.
But with core businesses like its smartphone, PCs, TVs and audio operations weaker than it expected through the first nine months of the fiscal year, Sony slashed its full-year operating profit forecast to 80 billion yen from the 170 billion yen it previously expected.