Sony today warned that it could post an annual operating loss of nearly $3 billion. The company blames the loss on the increasingly weak global economy and announced that it would be going ahead with restructuring and lay offs.
The news about restructuring and cutbacks in staff isn’t really a surprise. Last month Sony announced that it would be cutting as much as 8,000 jobs as well as reducing planned investments as a direct result of the current economic state and the strength of the Japanese currency. Despite the fact that Sony has cut 4,000 jobs abroad and 5,000 in Japan since 2003 (resulting in savings of around 83 billion yen per year), speculation following the announcement suggested that Sony would have to make further cuts and reductions.
The New York Times reports that the company projects an operating loss of approximately $2.9 billion, which represents a deterioration of 60 billion yen from the October forecast.
“The massive economic upheaval being experienced across the world is sparing no one in the consumer electronics world,” the Sony chief executive, Howard Stringer, said at a Tokyo news conference, according to the Times. This is a far cry from Stringer’s optimistic keynote at CES where he talked at length about innovation and the future.
The Times reports that the company said it expected to book restructuring charges of 60 billion yen this year and 110 billion yen next year as well as cutting 250 billion yen in costs next year. Sony executives said the top three managers would forgo their bonuses this year and other senior execs and managers would see reduced bonuses.
Check out the full story with all the numbers over on the New York Times.