Sony Hit With Billion Dollar Loss

May 15th, 2009 at 12:00 am
 


Sony Logo

Another industry giant has reported huge losses amid the continuing global economic crisis. Consumer electronics giant Sony recently reported that it lost 165 billion yen, or US$ 1.72 billion, for the fiscal fourth quarter ending March 31. This was a large disparity from the net income of 29 billion yen that the company posted for the same period a year ago. Sony said that it is the first time that the company has reported its first annual loss for more than a decade.

The reported loss was a dramatic change of fortunes for the electronics giant who posted 369.4 billion yen profits the previous fiscal year. Sony cited a number of factors that contributed to the fiscal year loss report, with the global recession playing a very large part of it. Declining sales of Sony products worldwide along with growing competition, stronger yen value and a sluggish Japanese stock market all contributed to put the electronics giant on the losing end.

Major Sony business segments experienced declines in overall sales. Revenue from their Play Station gaming console business dropped by 18 percent amid stiff competition from the Nintendo Wii and Microsoft Xbox 360. Consumer electronics revenue also declined 17 percent, with sales for Sony’s Bravia HDTV’s showing the only positive numbers. Other product sales such as camcorders, PC’s and digital cameras all suffered from poor sales.

In order to cope up with the losses, Sony is eyeing further cuts in their operating expenses as well as major job cuts. The company is planning to shut down three more manufacturing plants in Japan. The company also plans to cut down 8,000 jobs until the end of the year, most of them through forced retirement. Despite the cost-cutting steps, the company doesn’t expect to recovery any time soon. The company is even projecting another losing fiscal year that will end on March 2010.