Howard Stringer, the new CEO of Sony, unveiled his long-awaited restructuring plan for the troubled group. It was met with disappointment by the analysts.
Sony's plan:
- cut staff numbers by 10,000, or 7%
- reduce costs by Y200bn ($1.8bn)
- close 11 plants
- abandon its July profit forecast and face an operating loss this year
- full year operating loss of Y20bn instead of a Y30bn profit
- attain profitability by 2007 and a 5% operating profit margin by Mar 2008
- reduce no of product models by a fifth
- generate Y120bn from disposal of non-strategic assets and real estate
Stringer's new corporate vision for Sony is 'to focus selectively and aggressively on being the number one consumer electronics and entertainment company on the planet'.
Analysts seemed intent on a more radical restructuring at Sony, including much larger disposals of non-core assets such as their huge financial services unit. The problem for Stringer is that this unit generates a great deal of cash.
Analysts may be disappointed, but Stringer's vision looks right and let's face it his quiet, practical turn around approach worked in the last three years at Sony US. He gets my vote. Let's see.
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