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New Sony boss Kazuo Hirai is determined to to return flailing Sony to its former days of glory in consumer electronics -- not to mention profitability -- but the road ahead will be paved with pink slips as the CEO regroups into “One Sony.”
Reuters (via Yahoo! News) is reporting that Sony CEO Kazuo Hirai has made his first public briefing in his new position, which he inherited from Howard Stringer only last month. Feeling the pressure from Apple’s mobile devices and losing ground in the rest of the consumer electronics market from South Korea’s Samsung, Sony veteran Hirai plans “a major push into smartphones, growth in games and cameras and big cost cuts in a TV business that has not made a profit in eight years.”
"I am determined to transform and revive Sony. This is our only chance to change," Hirai told a packed news conference at the company’s Tokyo headquarters on Thursday. “We cannot shy away from difficult decisions," he said.
In the short term, that involves trimming the fat and stanching the mounting losses as the company becomes “One Sony.” The first move comes with the axing of 10,000 jobs (around six percent of Sony’s global workforce) and a 75 billion yen ($926 million) “restructuring charge” for 2012. The layoffs follow two prior cuts made during six years of Stringer’s tenure as CEO.
Hirai hails from Sony’s PlayStation video game unit, which he previously had success in reviving. Now as CEO, the executive has his eye on smartphones in the wake of Sony buying out Ericsson’s half of their former venture in that marketplace, to the tune of $1.5 billion.
However, Sony faces an uphill battle on nearly every front: Smartphones, digital cameras, video games and television. And the company is not alone, with Sharp and Panasonic also suffering from weak demand for their HDTV products. Sony now faces a reality where Japan’s “once-mighty television industry” may be anything but.
"Sony's fundamental problem is that it has lost its competitiveness," explains Hideyuki Suzuki, general manager of research at SBI Securities.
Hirai also plans to expand Sony’s horizons with “new businesses in medical equipment and electric car batteries,” having set a goal for 8.5 trillion yen ($105 billion) over the next two years.
Follow this article’s author, J.R. Bookwalter on Twitter
(Image courtesy of Reuters)