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Report: Sony To Post $1.1 Billion Loss?
by Eric Caoili
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January 13, 2009
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Sony could post an operating loss of around ¥100 billion ($1.1 billion) for the fiscal year ending March 31st, instead of its predicted ¥200 billion ($2.2 billion profit), as a result of underperforming sales and the strong yen.
The loss would be Sony's first in 14 years -- and if true, only the second reported loss since it went public in 1958.
According to a report from Reuters, the Nikkei Business Daily predicts that the loss could double to some ¥200 billion ($2.2 billion) depending on the electronics company's inventory build-up during the January-March quarter.
Sony announced in December that it plans to cut 8,000 jobs -– 4 percent of its work force –- as part of a cost reduction initiative aimed at saving $1.1 billion a year. The layoffs, which will come mostly from the company's electronics business (considered separate from Sony Computer Entertainment), are expected to be completed by March 2010.
An additional 8,000 temporary jobs will also be cut by March 2010, positions not officially considered part of Sony’s global work force.
"I think there's a good chance the company will further accelerate its restructuring from what has been announced in December," Daiwa Institute of Research's analyst Kazuharu Miura told Reuters.
The report follows recent speculation that Sony is considering a significant new restructuring campaign that could result in further job cuts and reorganizations -- or closings -- of a number of high-profile divisions. The company is expected to provide more details on its measures in February.
Sony Computer Entertainment specifically continues to struggle to attain profitability for the PlayStation business, and suffered diminished hardware sales in the key holiday month of November. Nonetheless, SCEE president David Reeves has said that the previously-announced restructuring at Sony would spare the PlayStation division.
Sony Japan spokesperson Atsuo Omagari recently denied speculation of further restructuring, responding: "We do not plan to announce additional restructuring measures at this time... we don't have any such plan."
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