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Report: Sony Restructuring Imminent Amid Management Tension

Report: Sony Restructuring Imminent Amid Management Tension

January 21, 2009 | By Leigh Alexander

January 21, 2009 | By Leigh Alexander
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More: Console/PC



Sony is about to announce specifics of its restructuring plans, including details of an anticipated 16,000 job cuts.

News of the imminent announcement comes from the Financial Times, which also reports that British-born Sony chairman Howard Stringer faces some challenges from "old guard" Japanese manufacturing execs on the specifics of the restructuring.

As a company, Sony's believed to be at an operational crossroads that applies to all of its businesses. Stringer has advocated a migration from a product-focused business model with high production costs to a commodity-focused model with a greater investment in built-in software, and the transition is reportedly causing internal management tension.

As a global organization rooted in Japan, Sony also must contend with that country's cultural tendency toward lifetime jobs; the Financial Times describes "acute sensitivity" toward firing Japanese staff. But given that an unspecified Sony manager told the FT that there's "a lot of fat" in the company's Japan operations, sparing that staff could anger the company's foreign employees.

Media reports have suggested that Sony could post a $1.1 billion loss for its fiscal year ending in March -- not only the greatest loss in its history, but only the second operating loss ever in the company's existence.

Sony Computer Entertainment specifically continues to struggle to attain profitability for the PlayStation business, and has suffered diminished hardware sales in recent months. Nonetheless, SCEE president David Reeves believes the restructuring at Sony is likely to spare the PlayStation division.


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