Sony to reduce the workforce by 10,000 in new competitive drive
Sony to reduce the workforce by 10,000 in new competitive drive
Pierre Leblanc and Joachim de Villiers
Modern Tokyo Times
The electronics division is extremely competitive and in recent times the company Sony faces major international competition. At the same time, technology never keeps still and the vitality of this company, seeking new markets, being a fresh innovator, seeing the changing market, and other vital areas, is being questioned by powerful rivals. Therefore, Sony is to reduce its workforce by 10,000 jobs and this represents around 6% of the entire workforce.
This major restructuring policy is meant to re-focus the company and at the same time streamline many unproductive areas and to reduce wastage. Kazuo Hirai, the Chief Executive, is keen to compete strongly with major players like Samsung, LG, Apple, and other competitors which challenge various markets.
The announcement of major job losses was not unexpected because it isn’t a secret that problems exist within the company. Given this, the announcement this week that the annual loss amounted to $6.4 billion dollars meant that the writing was on the wall for many workers. However, restructuring and re-organization isn’t just about reducing the workforce in order to bring down costs, it is about genuine policies which enables new vitality and fresh innovation.
Over the last twelve months the global economy continues to encounter many problems and the strong yen isn’t helping. Yet, other global competitors have braced up to this by focusing on understanding the changing market and understanding the needs of customers. Therefore, it is clear that internal problems need to be resolved and a fresh approach must be implemented in order for Sony to bounce back.
The three areas of concern for Sony in re-inventing itself apply to games consoles, digital imaging and mobile devices. These important markets are deemed to be “winners” for Sony and great emphasis will be put on all the above.
Kazuo Hirai commented that ““We have heard a multitude of investor voices calling for change. Sony will change….Sony has always been an entrepreneurial company. That spirit has not changed.”
However, many individuals remain skeptical about the narrowness of what was stated by Kazuo Hirai. After all, the same was promised by other powerful players within Sony three to four years ago but today both Samsung and Apple, and other competitors, are much stronger.
A senior analyst at Monex, Toshiyuki Kanayama, also appears rather skeptical because he stated that “I don’t see anything new here. They’ve talked before about bringing the TV business back to profits. The comments about the electronics business are the same.”
“Nothing has changed from what they’ve flagged in the past, including the M&A plans in the medical field.”
In an article by Tim Kelly and Chris Gallagher which was published in Reuters, it was stated that “Hirai, who previously revived the PlayStation video gaming unit, said he wanted to make Sony a leading player in mobile phones, which would be a “hub device” for the mobile business. He aims to treble revenue to 1.8 trillion yen ($22.2 billion) over the next three business years.
Sony recently bought out Ericsson’s half of their smartphone venture for $1.5 billion to shore up its position in an increasingly crowded market where Apple and Samsung lead. It has since launched its first smartphones, the Xperia series, under the Sony brand.”
It remains to be seen if Sony can turn things around because Sharp Corp and Panasonic Corp also face severe internal problems. However, the focus on new markets in the medical business area does look promising but older traditional markets may be more difficult to rejuvenate.
http://www.reuters.com/article/2012/04/12/us-sony-plan-idUSBRE83B09J20120412
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