The turnaround plan involves the shedding of 10,000 jobs – 6% of its global workforce – in order to stem further losses.
On Tuesday (10 April), Sony forecast a record annual loss of $6.4bn (£4bn) for 2012, but it hopes the reorganisation will help it generate sales of $10.5bn (£6.6bn) by 2015 and a profit margin of 5% in its electronics business. In 2011 Sony made annual sales of $7.9bn (£5bn).
In mobile, Sony says it will concentrate its research and development and marketing efforts to launch new products and new business models into the market.
It plans to “aggressively leverage” the use of its other technologies such as digital imaging, music, game and its recently re-branded Sony Entertainment Network to achieve sales in this division of $22.3bn (£14bn) and “significant” improvements in profit.
The company is expanding the catalogue of downloadable games titles and services available through its PlayStation Network platform and increasing the amount of PlayStation-compatible devices to further appeal to the mobile market and enrich sales in its games division.
CEO Kazuo Hirai says smartphones will become the “hub device” for entertainment on its platforms.
The company is also seeking to drive sales growth in these sectors in emerging markets, by leveraging its “brand strength” and marketing capabilities to increase the amount of products tailored to local needs. It expects sales from emerging markets to represent 60% of total anticipated global sales by 2014.
In a statement, Sony says: “By implementing a rapid decision-making approach that draws on the strengths of the entire Sony Group as “One Sony”, Sony aims to revitalise and grow the electronics business to generate new value, while further strengthening the stable business foundations of the entertainment and financial service businesses.”
Sony’s additional turnaround plans
- Sony plans to extend its use of digital imaging technologies to extend further into business sectors such as security and medical, as well as stepping up development of new technologies for consumer camera products.
- Sony also plans to bring its television division, which has been loss-making for eight years after failing to compete with rivals such as LG and Samsung, back to profit by cutting costs in the business by 60%.
- It will also follow its rivals’ lead by reducing the number of product lines available, for which it has previously been criticised as the company has around 200 current SKUs for televisions alone.