Sony’s new CEO has laid out a plan to revive the struggling electronics and entertainment giant. Among the bulleted items: laying off around 10 000 workers, and spending US $926 million to restructure the company over the next year.
The Sony brand’s luster has diminished over the years owing to strategic blunders in the past. The company is now in its fourth straight year of losses as it struggles to compete with rivals putting out the cutting-edge products it was once known for.
Kazuo Hirai, who took over from Howard Stringer this month, said in a news conference that he’s ready to make “painful decisions” to turn around the company. “The time for Sony to change is now,” he said. “Sony will change.”
Hirai's new strategic initiatives include a deep restructuring of Sony’s ailing TV business; strengthening its core gaming, digital imaging, and mobile device businesses; shifting focus to emerging markets in India and Mexico; and getting a foot into the fast-growing medical business.
People link the company’s tragic decline to Stringer’s predecessor Nobuyuki Idei, who first recognized the convergence of electronics with media and led Sony into the media and entertainment arena. But he couldn’t really get the company’s multiple different divisions to work synergistically. Instead of combining electronics and entertainment, it lost its focus on both, and with them, its hold as a developer of revolutionary, trend-setting products, giving way to companies such as Apple and Samsung. From the New York Times:
It now makes a bloated and bewildering lineup of gadgets, from handycams to car stereos.
Under Idei’s decade-long tenure, Sony was late to enter the market for digital cameras, cell phones and flat-panel TVs. More recently, Sony has been late to the to LCD TV game, and has been slow to react to Apple’s iPhone and iPad.
But Sony isn’t alone in losing their status as tech innovators. Its brethren Panasonic and Sharp have done the same. And now, a strong yen and slowing demand for flat-panel TVs are battering the three top Japanese consumer electronic manufacturers. The companies expect their biggest-ever losses, a $21 billion combined total, for the fiscal year that just ended.
PHOTO: Colony of Gamers, Flickr