Sony forecasts record annual loss of $6.4bn

Electronics giant will cut 10,000 jobs worldwide, blaming fourth year of losses on high US tax charges and strong yen.

    Sony's new CEO Kazuo Hirai has the task of bringing the company's profits into black [AFP]
    Sony's new CEO Kazuo Hirai has the task of bringing the company's profits into black [AFP]

    Japanese electronics giant Sony has forecast an annual loss of $6.4bn, double its previous estimate and a record loss for the firm.

    In its forecast revealed on Tuesday, the company blamed the record loss on tax charges related to its US business.

    The company is planning to cut 10,000 job as Sony exits businesses that are not profitable or central to the firm's strategy.

    In February, it had projected an annual net loss $2.7bn due to weak TV sales, the strong yen and from disruptions to production from flooding in Thailand. That estimate has since been revised upward to $6.4bn.

    The company said its operating loss forecast was unchanged at a loss of $1.2bn.

    It forecast a return to profit in the year through March 2013, even though it is company's fourth year of losses.

    New strategy

    Japanese news reported on Monday said Sony would cut about 10,000 jobs worldwide over the next year as it tries to return to profit, but the company would not confirm that.

    Kazuo Hirai, who took over as CEO from Howard Stringer, is due to outline the company's new corporate strategy on Thursday.

    Sony, whose businesses sprawl from cameras and cellphones to PlayStation game consoles and movies such as "The Smurfs", has for years been struggling to regain the swagger and creative flair that made it a dominant force in the global electronics industry in the 1980s and early 1990s.

    Rival Japanese TV maker Sharp is also forecasting hefty losses. Sharp expects an annual loss of $4.7bn, up from its initial forecast of $3.6bn.

    Downsizing Japan

    The job cuts are the latest layoffs in Japan where companies from NEC Corp and Sumco Corp to Daiwa Securities are cutting costs to revamp their businesses.

    Sony itself announced in December 2008 cuts of 16,000 workers after the global financial crisis hit demand for its electronics products, but it still has not made a profit since then.

    As of the end of March of 2011, Sony had 168,200 employees on a consolidated basis, according to its website.

    SOURCE: Agencies


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