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'One Sony' Plan De-Emphasizes TV

4/12/2012 10:47:01 AM Eastern
Tokyo - New Sony CEO Kazuo Hirai revealed a corporate turnaround plan here Thursday that as previously reported will involve a global downsizing costing 10,000 jobs, and a shift in product focus away from TVs to portable/mobile electronics, gaming and digital imaging.

Kazuo Hirai
Under the so-called "One Sony" plan, the company will seek to turn around the television business, but it has highlighted three other sectors as its top revenue generators. The company will also expand business in emerging markets, create new businesses and realign its business portfolio while optimizing resources.

The 10,000 jobs to be eliminated in 2012 will come, in part, by selling off non-core businesses and restructuring others, Sony said.

The company said it will take a one-time charge of $926 million for restructuring costs this fiscal year.

A company statement revealed plans to raise operating-profit margin to 5 percent, have a return on capital of 10 percent, and to cut fixed costs by 60 percent at TV operations.

Going forward, Sony, which has seen a cumulative $8.8 billion loss from TV operations over the past eight years, will cut TV operating costs and reduce its model assortment. Hirai said the unit, which he is personally overseeing, will still look to achieve the profit goals originally outlined by former CEO Howard Stringer in 2005.

The remaining TV operations will continue to develop and commercialize OLED, Crystal LED and 4K technologies, and will expand sales in emerging markets and medical applications.

As TVs are de-emphasized, Sony will step up its focus on digital imaging, gaming and mobile electronics, with a target of having the "three core" businesses achieve 70 percent of revenue and 85 percent of operating profit in the year ending March 2015.

Hirai, who took the helm of Sony this month after directing Sony's successful PlayStation game business, said in February it would be "very difficult to imagine Sony getting out of the TV business."

Sony, which was worth more than $120 billion in 2000, is now valued at $19 billion. In comparison, rival Apple is valued at $584 billion and Samsung is valued at $164 billion.

Sony announced it is also considering an alliance on batteries for electric cars and will consider selling or forming alliances in businesses that are losing money, offer little growth potential or lack synergies with its other core electronics businesses.

Sony reported that it has cut 66,500 jobs across four restructuring plans since 1999.
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