LOS ANGELES (Reuters) - Sony Entertainment, under pressure from hedge fund manager Daniel Loeb to improve the profitability of its film studio, has hired consultancy Bain & Company to help identify more than $100 million in cost cuts through layoffs and other means, according to a source with knowledge of the move.
Bain’s hiring is expected to be announced at a Sony investor meeting scheduled at the company’s Culver City, California studio lot on Thursday, according to the source.
“As part of a nearly four year process of increasing fiscal discipline, Sony Pictures is conducting a review of its business to identify further efficiencies,” Sony spokesman Charles Sipkins said in a statement.
“Our objective is, and always has been, to operate an efficient studio that is uniquely positioned to capitalize on future growth opportunities.”
Bain’s engagement was first reported by the New York Times.
Loeb, an activist investor who owns about 7 percent of the Japanese electronics and entertainment conglomerate through his Third Point hedge fund, wrote to Sony Corp CEO Kazuo Hirai in May to encourage “a more disciplined management approach to Sony Entertainment.”
The studio has since replaced its film marketing chief and reduced film marketing costs.
In October, Sony reported that its Pictures unit, which includes the movie studio as well as TV production and TV networks, had a second quarter operating loss of $181 million, due in part to the underperformance of summer film “White House Down.”
The company’s box office performance has improved lately with hits like “Cloudy with a Chance of Meatballs 2.”
Reporting by Ronald Grover; Editing by Cynthia Osterman