It’s like they say: You gotta spend money to make money. And in Sony’s case, you apparently have to spend a whole lot of it.
The consumer electronics giant is putting $1 billion into the corporate version of Extreme Home Makeover, which will be heavy on demolition and is expected to lead to a lean, mean, bottom-line-oriented machine known as One Sony.
The demolition is set to include 10,000 pink slips for unlucky (current) Sony employees — that’s around six percent of Sony’s total workforce — and will bring several of the company’s sprawling divisions under some tidy new umbrellas.
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All this restructuring is part of the new CEO’s plan to turn the company around after posting a record $6.4 billion in losses for the 2012 fiscal year. With the job cuts and the corporate reorganization, Sony anticipates an operating profit of $2.2 billion for the current fiscal year ending March 2013.
Sony CEO Kazuo Hirai (pictured) said today at a press conference in Tokyo that the company plans to bolster its TV business while better defining and strengthening its three core device segments: mobile, cameras, and gaming. To that end, the design and development for Vaio, tablets, and smartphones will now all fall under the same division, and R&D time is expected to be cut in half.
On the gaming side, Hirai said the company would be increasing the number of downloadable titles as well as the number of PlayStation Suite devices.
Altogether, the restructuring will cost $926 million. The “One Sony” idea was first announced last month in the wake of massive losses. Hirai, who was only appointed as CEO in February 2012, has been vocal about his desire to restructure and save Sony since his appointment to the position.
“I thought turning around the PlayStation business was going to be the toughest challenge of my career, but I guess not,” Hirai told the Wall Street Journal in an interview two months ago. “It’s one issue after another. I feel like ‘Holy s—, now what?’”
hat tip: Reuters