For the past few years, the Japanese giant, Sony has not been doing well. Two years ago, the company’s CEO Kazuo Hirai had promised to bring back the Sony’s electronic division to profitability, but Sony is still making losses and according to forecasts, it will continue to do so, until next year.
Sony has already posted losses of 125 billion Yen in the last financial year and the company said it expected further net loss of 50 billion Yen (which comes around $489m) in the coming financial year. This last financial quarter was particularly bad for the company, with the sale of its Vaio business to Japan Industrial Partners (JIP) and the costs associated with it increasing the total losses up to 138 billion Yen ($1.3 billion) from January to March.
Sony, who was once the forerunner in the electronic industry, is now under immense pressure from competitors like Samsung and Apple.
The company’s profits have dwindled in the past few years mainly due to the low demand for its flagship products in the television and computer segments. Last year, Sony had started restructuring some of its manufacturing units and internal businesses, however, that didn’t help as much as expected. Finally, after everything failed in its PC business, the company decided to let go of its PC division earlier this year.
While the sale would have brought in some money to the company, it would also help Sony to concentrate on its key businesses, like television and smartphone business. CEO Hirai has already restructured its TV business into an independent unit, which the company hopes will bring profitability and stability to the unit.
With regard to its restructuring plans, the company will cut down 5,000 jobs globally. Sony will also sell off its stake in Japanese satellite broadcaster Sky Perfect and the Manhattan headquarters in US.
In the coming fiscal year, the company plans to spend around 135 billion Yen on restructuring. Further, the strong demand for its smartphones, cameras and Play Station gaming consoles could bring back the company to profitability.
PS4 has been doing quite well worldwide and the company recently announced that it sold over 7 million consoles, since its launch last year. Its recently announced flagship phone, Xperia Z2 is also getting positive response, which means things could get better for the company in the coming years.
Sony expects sales to hit 7.8 trillion mark and operating profit of 140 billion Yen by March 2015.
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