Sony Poised For Job Cuts And Record Loss

Troubled electronics firm Sony has more than doubled its projected loss for this year amid reports that it is to cut 10,000 jobs worldwide.

The Japanese company said it expects to make a loss of 520bn yen (£4bn) this year, its fourth year of red ink and worst deficit yet.

In February, it had projected an annual net loss of 220bn yen (£1.7bn) after weak TV sales, the strong yen and production disruptions from flooding in Thailand.

The once pioneering company has struggled to keep up with competition from more innovative gadget rivals such as Apple and Samsung Electronics.

For years it has been battling to regain the swagger and creative flair that made it a dominant force in the global electronics industry in the 1980s and early 1990s.

The Tokyo-based maker of PlayStation consoles and Bravia televisions blamed a 300bn yen (£2.33bn) tax charge for its revised full-year loss.

It said the extra cost stemmed from revaluing US tax credits that are unlikely to be utilised due to its string of annual losses.

It comes as Sony is expected to announce it is cutting around 6% of its global workforce – or 10,000 jobs – later this week

New chief executive, Kazuo Hirai, will reveal sweeping reforms in an attempt to return the firm to profit next year.

Sony forecasts it will bounce back in the year ending in March 2013 with an operating profit of 180bn yen (£1.4bn).

Japanese media reported that about half of the planned job cuts are part of a restructuring of Sony’s chemical unit as well as operations tied to its small and medium-sized liquid crystal display panels.

The company’s top seven executives, including its outgoing chief, would also give up their annual bonus, the leading Nikkei business daily paper said.

Sony declined to comment on the reports but Mr Hirai, who took over the helm at Sony from Welsh-born Howard Stringer this month, has said he is prepared to take “painful steps” to revive the company.

The Sony veteran, known for reviving the PlayStation gaming operations through aggressive cost-cutting, has insisted he will not hesitate to scale back or withdraw from businesses he deems uncompetitive.

He has also promised to get the struggling TV business – which has lost £6.3bn alone in 10 years – back on its feet within two years.

Sony’s headcount stood at about 168,000 employees in March last year.

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