LITTLE ROCK — Sony Corp., the Japanese electronics maker that has forecast a fourth-straight annual loss, will cut about 10,000 jobs, or 6 percent of its work force, the Nikkei newspaper reported on its website Monday.
As many as 5,000 job cuts will come from reorganizing businesses making chemicals and small and medium-size flat-screen televisions, Nikkei reported. George Boyd, a spokesman for the Tokyo-based company, declined to comment when contacted by phone.
Chief Executive Officer Kazuo Hirai, 51, who took the helm this month from Howard Stringer, has vowed “painful” steps to turn around Sony as consumers flock to devices from Samsung Electronics Co. and Apple Inc. Standard & Poor’s and Moody’s Investors Service have both downgraded Sony, which in February more than doubled its annual loss forecast, blaming a stronger yen, production cuts caused by last year’s floods in Thailand and the cost of exiting a display-panel venture with Samsung.
“The job cuts are just a temporary fix for Sony,” Mitsuo Shimizu, a Tokyo-based analyst at Cosmo Securities Co. said Monday. “This wouldn’t help address the company’s real problems, like the slumping TV business.”
Sony shares rose 0.6 percent to $20.14 at the close in Tokyo trading. The stock has gained 19 percent this year after slumping 53 percent last year.
Japan’s largest consumer electronics exporter had 168,200 employees as of March 31, 2011, according to data compiled by Bloomberg.
“Shares are going up because of the Nikkei report,”said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. “The market expects that it will contribute to improvement of their business.”
Hirai is scheduled to elaborate on his management plan Thursday for the company, which set the trend during the 1980s with products such as the Walkman. Sony, worth $200 billion in September 2000, is now valued at $20 billion, compared with $591 billion for Apple and $170 billion of Samsung.
The new CEO, who’s been credited with making the Play-Station game business profitable, is bringing in a new team and has put himself in charge of Sony’s TV business, which is forecast to lose money for an eighth consecutive year.
In February, Sony predicted it would post a loss of $2.7 billion in the year that ended March 31. A fourth consecutive annual loss would be a first for the company since it listed in 1958.
Hirai has already taken action on turning around the TV business. Last year, Sony exited a panel-making venture with Samsung. The sale of the stake in the venture to the South Korean company will save Sony’s TV operation about $612 million.
Hirai took over from Stringer, 70, who is to become chairman of the board after a shareholder meeting in June. Stringer, who took over in June 2005, replaced division leaders to spur cooperation and cut 30,000 jobs to revive earnings.
In 2005, Stringer announced the company will eliminate 10,000 jobs and shut 11 factories after predicting the company’s first annual loss in more than a decade.
Stringer followed that in 2008, by announcing plans to eliminate 16,000 jobs - then the largest reduction announced by a Japanese company since the credit crunch drove the world into a recession.
Standard & Poor’s cut Sony’s credit rating one level in February to BBB+, S&P’s third-lowest investment grade, because of falling prices, waning demand and tougher competition. The announcement followed downgrades by Moody’s and Fitch Ratings, which cited difficulty in turning around the unprofitable TV business.
“I expect the new president, Hirai, to cut unprofitable sectors and rebuild the company,” Shinkin’s Fujiwara said.
Information for this article was contributed by Kazuyo Sawa and Pavel Alpeyev of Bloomberg News.
Front Section, Pages 1 on 04/10/2012