Sony needs more streamlining steps: president

TOKYO, Dec. 18 Kyodo - Sony Corp., which recently announced 16,000 job cuts and other drastic restructuring plans, needs to implement further steps, possibly including additional job cuts, to cope with the rapidly deteriorating economic situation, its president Ryoji Chubachi said Thursday.
Hit by dwindling demand for consumer appliances and the yen's surge, Sony said
last week it will cut a total of 16,000 regular and non-regular jobs, close 10
percent of its production bases, and slash its fiscal 2009 investment by 30
percent from its earlier plan, all concerning its mainstay global electronics
operation.
However, Chubachi told Kyodo News, ''With only these measures, we cannot fully
survive the current economic situation.''
He said Sony needs to review its operations across broader areas including
headquarters, research and development, and marketing operations in Japan, and
that it also should shift more personnel resources to better ''cash
generating'' areas.
''After implementing such personnel realignments, if there is still an area
that has excess personnel, we will have to take further action from the
perspective of overall costs,'' he said.
Given the harsh business conditions Sony faces, Chubachi said the company has
to review the timing of achieving the goal of expanding its personal computer,
Blu-ray Disc-related product and component/semiconductor operations into
''trillion yen businesses'' by March 2011, set under its medium-term business
plan.
Chubachi said business conditions are getting worse, with demand for its
consumer appliances falling, especially since late November. The trend ''would
not be a temporary but a long-lasting one,'' he said.
Chubachi blamed the yen's sharp appreciation against both the U.S. dollar and
the euro as another depressing factor for Sony, calling it ''excessive'' and
''beyond expectations.'' The higher yen will lead to higher prices of some of
Sony's products overseas, he added.
As to Sony's loss-making liquid crystal display televisions, the situation is
''extremely severe'' and the company has to make its business structure more
resilient to sales and currency fluctuations through such measures as cutting
fixed costs, Chubachi said.
Referring to its next-generation thin TVs equipped with organic light emitting
displays, Sony will ''accelerate development for OLED TVs as planned,''
Chubachi said, adding, however, that the company has to postpone investment for
the mass production of them in light of slowing LCD TV sales.
In October, the Japanese electronics giant sharply revised down its earnings
forecast for the current business year ending next March, due to
worse-than-expected LCD TV and digital camera operations, the yen's surge, and
equity investment losses stemming from the financial market meltdown.
It is now expecting its group net profit for fiscal 2008 to slump 59 percent
from a year earlier to 150 billion yen, on sales of 9 trillion yen, up 1
percent.
==Kyodo