Sony To Cut 10,000 Jobs As Part Of New CEO's Overhaul

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Kazuo Hirai
Kazuo Hirai took over as Sony CEO on April 1, replacing Howard Stringer, who remains the company's chairman.

Sony Corp. (TYO: 6758) plans to eliminate 10,000 jobs, or about 6 percent of its global work force, as part of new CEO Kazuo Hirai's restructuring plan, according to reports Monday.

The cuts could run through the two fiscal years ending in March 2014, although the time frame hasn't been finalized, the Wall Street Journal cited people familiar with the matter as saying.

News of the layoff plans, first reported Monday by Japan's Nikkei business daily, are the latest details to emerge about Hirai's restructuring plan, which is to be announced by Sony on Thursday.

Hirai replaced Howard Stringer as chief executive of the electronics and entertainment giant on April 1.

At least half of the reduction in head count is expected to come from two restructuring moves Sony has already announced, the Nikkei reported. In March the company said it had struck a deal to sell its chemical-products business to the Development Bank of Japan. It also spun off its midsize liquid-crystal-display, or LCD, operations to Japan Display Inc., a new government-backed venture involving Sony and rival electronics makers Toshiba Corp. (TYO: 6502) and Hitachi Ltd. (TYO: 6501).

Sony has said those two deals would move as many as 5,000 jobs outside of the company.

The remaining cuts are expected to come partly from Sony's television division, which is expected to lose money for an eighth straight year, the people cited by the Journal said.

The restructuring would be the second by Sony in four years. As of March 2011, it had 168,200 employees worldwide, according to its website.

The Nikkei said it wasn't clear how many of the cuts would take place in Japan or abroad.

Sony may also ask its seven executive directors who served through the fiscal year that ended March 31, including Stringer, who is now chairman, to return their bonuses, the Nikkei reported.

Sony declined to comment on the report.

Sony announced 16,000 job cuts in December 2008 after the global financial crisis battered demand for its products, but it has not managed to make a profit since then.

The company has forecast a net loss of 220 billion yen ($2.7 billion) for the recently ended fiscal year, hurt in large part by its flailing TV business.

Sony's Tokyo-traded shares closed up 0.6 percent Monday, while Japan's benchmark Nikkei stock index ended 1.5 percent lower.

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