Kazuo-Hirai

Financial Woes Continue to Dog Sony Electronics, More Job Cuts on the Cards

December 31, 2013 - Written By Syed Sofian Rabbani

Financial woes have not been leaving Sony and may have worsened over the last financial year. In April 2012 Kazuo Hirai took the helm as President of Sony and had put in his efforts to revamp their electronics product line – a business segment that has been bleeding due to a combination of a sluggish domestic market (in Japan) as well as tough competition from Korean rivals – LG & Samsung. The recent years have seen public demand move away from digital cameras, camcorders and ‘walkmans’ to smartphone devices, in which the Japanese manufacturer has been bested by Samsung.

In order to turn a profit, Kazuo Hirai had no other option but to cut operating costs and trim staff. Sony had effectively used early retirement as an option to trim costs and reduced its staff by 10000, of which around 3000 job cuts had happened in Japan alone.

Nikkei Asia  reports that in its continuing efforts to turn a profit by this financial year ending, Sony will begin offering early voluntary retirement options to mid-level and management employees at its wholly owned Japanese subsidiary Sony EMCS, which employs 5000 staff and operates five production facilities. The scheme would be offered to employees above 40 years of age and have completed at least 10 years with Sony EMCS. Applications would be open from January 6th to the end of March 2014. All employees opting for the scheme will leave the company by the last week of April at the latest.

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The staff opting for voluntary retirement will be put in touch with companies offering re-employment assistance  and would be provided with a severance pay package which – depending on the age and tenure of the employee – may extend up to (or more than) 10 months’ pay. However, Sony has clarified that no targets have been set for this retirement scheme and it is totally up to the interest of employees willing to take this voluntary retirement.

Through these measures the embattled Japanese manufacturer aims to turnabout the downward swing of its fortunes. Sony has downgraded its full-year sales forecast for majority of its products at the end of October itself. Sony is banking on the launch of its two flagships in the first half of 2014 to see its market share improve.