Sony CEO to lay out revival strategy as losses pile up

Thu Apr 12, 2012 1:38am EDT
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By Tim Kelly

TOKYO (Reuters) - Kazuo Hirai's brief honeymoon as Sony Corp's new chief has ended abruptly as the struggling electronics giant doubled its annual loss forecast, sending its shares tumbling.

On Thursday he will try to convince investors he has a strategy to fix Sony and its ailing TV unit, and turn around a brand that has been trampled on by consumer gadget leaders Apple Inc and South Korea's Samsung Electronics.

Hirai, who succeeded Howard Stringer as CEO this month, will lay out a detailed plan he hopes will revive the company hobbled by a television business that has racked up $10 billion in cumulative losses in eight years, battered by weak demand, fierce competition and a stronger yen that makes exports less competitive.

At stake is not only the viability of Japan's best known brand, but also the future of Japan's once-dominant TV industry.

"Japan's consumer electronics industry is facing defeat," said Fujio Ando, senior managing director at Chibagin Asset Management.

Sony, Sharp Corp and Panasonic Corp, Japan's three biggest TV makers, expect to report a combined loss for the year just ended of $21 billion - more than Sony's entire market value.

Hirai, a 26-year Sony veteran, has vowed to take "painful steps" and insisted he won't shy away from weeding out poorly performing businesses or making cuts to bolster profitability. He is likely to announce a third wave of job cuts, adding to the two rounds of layoffs Stringer made in his six-year tenure.

The axing of another 10,000 jobs, according to local media reports, comes as Sony expects to announce in May a record $6.4 billion loss for the year to end-March. Sony is targeting a return to operating profit in the current business year - of 180 billion yen ($2.22 billion).   Continued...

Sony Corp Chief Financial Officer Masaru Kato attends a news conference in Tokyo April 10, 2012. Sony Corp forecast a record $6.4 billion net loss for the business year just ended, double earlier forecasts and a fourth straight year of losses, inflated by writing off deferred tax assets in the United States. REUTERS/Issei Kato