Sony forecasts that it will report its first operating loss in 14 years when it announces its full-year results. It has predicted that it will see a loss of about Y260bn (£2bn) by the end of the financial year (March 31).
The global downturn has been blamed for the reduction in sales and the company also attributes losses to the stength of the yen for increasing prices on exports. It says that a lack of consumer confidence, particularly in the US and Japan, are also be responsible the losses.
Sony has also announced additional restructuring of its electronics, film and music divisions, which will include stopping production at one of its Japanese factories in a bid to streamline its operations.
The company also plans to move all of its TV production in Japan to one plant. These changes could mean up 16,000 job cuts worldwide.
The consumer electronics giant also predicted as recently as October that it would make profits of Y200bn (£1.64bn) this year following the closure of some of it’s manufacturing plants and 8,000 job cuts. The expected loss was much bigger than analysts had anticipated after an operating loss was seen during the Christmas trading period.
Sir Howard Stringer, the president of Sony, made the announcements today in advance of an emergency press conference to be held in Tokyo. Ryoji Chubachi, chief executive of the electronics division, will also be in attendance.
LG Electronics, the third largest appliance maker in the world has also reported its first loss in almost two years.