Sony doubles forecast of annual loss to $6.4bn

Vendor is planning 10,000 job cuts as it exits businesses that are not profitable

Tags: Sony Corporation
  • E-Mail
Sony doubles forecast of annual loss to $6.4bn Hirai is expected to outline Sony's turnaround strategy.
By  Manda Banda Published  April 10, 2012

Consumer electronics giant Sony has forecasted an annual loss of $6.4bn, double its previous estimate reported in February 2012 and a record loss for the firm.

The grim forecast comes as Sony's new chief executive officer, Kazuo Hirai, prepares a turnaround plan, which he is expected to outline later this week, the company said in a statement.

Reports suggest the company is also planning 10,000 job cuts as Sony exits businesses that are not profitable or central to the firm's strategy going forward.

The company has blamed the record loss on tax charges related to its US business. This is the company's fourth year of losses.

On the face of it Sony's problems are simple, but fixing them will be a challenge for Hirai, as the content and device divisions of the company have not been able to work out how to create one seamless consumer experience.

Apple on the other hand, has trounced the maker of the Walkman with its iPod and iPhone offering.

In televisions, Sony has faced brutal competition from the likes of Samsung with the high yen giving companies based in Japan a distinct disadvantage.

But Sony is not the only Japanese consumer electronics maker that is struggling, Sharp too has been battling to compete with South Korea's Samsung and LG who both have profitable TV units.

In its latest forecast, Sony said it still expects to make an operating loss of $1.2bn for the year to 31 March, but hopes to return to profit in the current financial year.

Sony has stated that for the fiscal year starting April 1, 2012, with assumed foreign currency exchange rates of approximately 80 yen against the US dollar and approximately 105 yen against the euro, the company is forecasting a return to positive operating results and that its consolidated income for the fiscal year ending March 31, 2013 will be approximately $2.2 billion.

Sony said the details of the actual consolidated results for the fiscal year ended March 31, 2012 and the consolidated results forecast for the fiscal year ending March 31, 2013 are scheduled to be announced on May 10, 2012.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code