ID :
42306
Fri, 01/23/2009 - 10:45
Auther :
Shortlink :
https://oananews.org//node/42306
The shortlink copeid
Sony to incur largest-ever loss for FY 08, step up cost cuts
TOKYO, Jan. 22 Kyodo -
(EDS: ADDING BACKGROUND INFO IN 4TH GRAF)
Sony Corp. said Thursday it expects to incur its largest-ever operating loss in
the year to March, hit by the yen's sharp appreciation and slumping sales of
its electronics products, and that it will step up cost-cutting efforts to deal
with the deepening global economic downturn.
Sony said it plans to consolidate two TV production factories in Aichi
Prefecture and cut about 1,000 temporary jobs as part of a major restructuring
program to steer out of the worldwide industry slump.
The company is now projecting a record group operating loss of 260 billion yen,
marking a major turnaround from last October's forecast of an operating profit
of 200 billion yen. It would be Sony's first operating loss in 14 years.
The announcement provides further evidence of the serious damage the global
economic crisis has inflicted on top-ranking Japanese manufacturers, with
Toyota Motor Corp. saying late last year that it is expecting its group
operating loss of 150 billion yen in fiscal 2008, while Nissan Motor Co. is
reportedly likely to post a group operating loss of tens of billions of yen for
the year.
''The massive economic upheaval being experienced across the globe is sparing
no one in the consumer electronics world,'' Sony Chairman and Chief Executive
Officer Howard Stringer said at a press conference in Tokyo.
''We must now embrace many difficult decisions in order to deal with this new
reality immediately,'' he said.
For the current 2008 business year, Sony also expects to incur a net loss of
150 billion yen, instead of a profit of the same amount as forecast in October,
on sales of 7.7 trillion yen, down from the previously projected 9 trillion
yen.
Sony attributed the downward revisions to its earnings forecasts to far worse
than expected sales of flat-panel TVs and other consumer appliances during the
year-end shopping season, as well as falling product prices amid tough
competition with rivals.
The yen's recent sharp appreciation against the dollar and the euro also dealt
a hard blow to Sony, which generates two-thirds of its revenue outside of Japan
and so is especially vulnerable to currency fluctuations.
On top of that, additional restructuring costs and declines in Japan's stock
market have also weighed heavily on its earnings, Sony added.
It plans to save 250 billion yen in costs in the fiscal year through March 2010
through a drastic restructuring program including bonus cuts for executives.
Sony said Stringer, President Ryoji Chubachi and Executive Deputy President
Katsumi Ihara will waive their bonuses for this fiscal year and also see cuts
in other payments.
As a result, their annual salaries will be more than halved from a year
earlier, Chubachi told the same press conference.
Other board members and managerial level officials will also see pay cuts, he
added.
In December, Sony announced it would cut the jobs of about 16,000 regular and
nonregular workers around the world and implement other restructuring plans.
The 1,000 job cuts announced Thursday are seen as part of the global workforce
reduction.
Sony also said it would introduce an early retirement program for its regular
employees as it seeks to slash its global workforce engaged in TV design
operations and related divisions by about 30 percent by the end of fiscal 2009.
As for the TV factory restructuring plan, Sony said it will end production at
its subsidiary Sony EMCS Corp.'s plant in Ichinomiya in Aichi Prefecture by
around June 2009.
The firm will then shift the production to a TV assembly plant in Inazawa in
the same prefecture to improve the productivity of its TV operations.
The Ichinomiya plant currently has about 1,300 workers, mostly nonregular
employees.
While Sony plans to reduce about 1,000 nonregular employees through the
consolidation of TV factories, the firm said it will shift regular workers at
the Ichinomiya plant to the Inazawa plant.
Chubachi said Sony does not believe the 250 billion yen in cost cuts will be
enough to steer through the current economic turmoil and called the firm's
latest restructuring plan an ''emergency response measures.''
''Currency and business conditions remain uncertain, and we have to consider
various things incrementally,'' Chubachi said.
Sony's projected operating loss would be its largest since the firm began
releasing its earnings on a consolidated basis for the year to October 1961.
==Kyodo
(EDS: ADDING BACKGROUND INFO IN 4TH GRAF)
Sony Corp. said Thursday it expects to incur its largest-ever operating loss in
the year to March, hit by the yen's sharp appreciation and slumping sales of
its electronics products, and that it will step up cost-cutting efforts to deal
with the deepening global economic downturn.
Sony said it plans to consolidate two TV production factories in Aichi
Prefecture and cut about 1,000 temporary jobs as part of a major restructuring
program to steer out of the worldwide industry slump.
The company is now projecting a record group operating loss of 260 billion yen,
marking a major turnaround from last October's forecast of an operating profit
of 200 billion yen. It would be Sony's first operating loss in 14 years.
The announcement provides further evidence of the serious damage the global
economic crisis has inflicted on top-ranking Japanese manufacturers, with
Toyota Motor Corp. saying late last year that it is expecting its group
operating loss of 150 billion yen in fiscal 2008, while Nissan Motor Co. is
reportedly likely to post a group operating loss of tens of billions of yen for
the year.
''The massive economic upheaval being experienced across the globe is sparing
no one in the consumer electronics world,'' Sony Chairman and Chief Executive
Officer Howard Stringer said at a press conference in Tokyo.
''We must now embrace many difficult decisions in order to deal with this new
reality immediately,'' he said.
For the current 2008 business year, Sony also expects to incur a net loss of
150 billion yen, instead of a profit of the same amount as forecast in October,
on sales of 7.7 trillion yen, down from the previously projected 9 trillion
yen.
Sony attributed the downward revisions to its earnings forecasts to far worse
than expected sales of flat-panel TVs and other consumer appliances during the
year-end shopping season, as well as falling product prices amid tough
competition with rivals.
The yen's recent sharp appreciation against the dollar and the euro also dealt
a hard blow to Sony, which generates two-thirds of its revenue outside of Japan
and so is especially vulnerable to currency fluctuations.
On top of that, additional restructuring costs and declines in Japan's stock
market have also weighed heavily on its earnings, Sony added.
It plans to save 250 billion yen in costs in the fiscal year through March 2010
through a drastic restructuring program including bonus cuts for executives.
Sony said Stringer, President Ryoji Chubachi and Executive Deputy President
Katsumi Ihara will waive their bonuses for this fiscal year and also see cuts
in other payments.
As a result, their annual salaries will be more than halved from a year
earlier, Chubachi told the same press conference.
Other board members and managerial level officials will also see pay cuts, he
added.
In December, Sony announced it would cut the jobs of about 16,000 regular and
nonregular workers around the world and implement other restructuring plans.
The 1,000 job cuts announced Thursday are seen as part of the global workforce
reduction.
Sony also said it would introduce an early retirement program for its regular
employees as it seeks to slash its global workforce engaged in TV design
operations and related divisions by about 30 percent by the end of fiscal 2009.
As for the TV factory restructuring plan, Sony said it will end production at
its subsidiary Sony EMCS Corp.'s plant in Ichinomiya in Aichi Prefecture by
around June 2009.
The firm will then shift the production to a TV assembly plant in Inazawa in
the same prefecture to improve the productivity of its TV operations.
The Ichinomiya plant currently has about 1,300 workers, mostly nonregular
employees.
While Sony plans to reduce about 1,000 nonregular employees through the
consolidation of TV factories, the firm said it will shift regular workers at
the Ichinomiya plant to the Inazawa plant.
Chubachi said Sony does not believe the 250 billion yen in cost cuts will be
enough to steer through the current economic turmoil and called the firm's
latest restructuring plan an ''emergency response measures.''
''Currency and business conditions remain uncertain, and we have to consider
various things incrementally,'' Chubachi said.
Sony's projected operating loss would be its largest since the firm began
releasing its earnings on a consolidated basis for the year to October 1961.
==Kyodo
