Sony Unveils ¥1.3 trillion Overhaul as Losses Soar

28 April 2003

Sony is planning a ¥1.3 trillion ($10.8 billion; €9.8bn; £6.8bn) recovery scheme after astonishing investors with a twenty-fold increase in quarterly losses.

The electronics colossus posted a net shortfall of ¥111.1bn in the three months to March, Sony’s fiscal fourth quarter. Such massive losses were blamed on the restructuring of its music and electronics divisions, war in Iraq and the SARS outbreak.

That left the Japanese giant with full-year net profits of ¥115.5bn, over seven times as much as the previous year but well below its ¥180bn target. Operating income of ¥185.4bn undershot forecasts of ¥280bn.

As a result, Sony is embarking on a three-year overhaul of its operations. It intends to spend ¥500bn on slashing prices of current products, plus ¥500bn on developing new technology and ¥300bn on cost-shaving and restructuring.

“We cannot leave the situation unaddressed and let profitability tumble,” declared chief executive Nobuyuki Idei. “In a way, we are now at a key transition phase.”

Data sourced from: multiple sources; additional content by WARC staff