Japanese consumer electronics and entertainment giant Sony has announced sweeping changes that include huge layoffs, selling assets, and closing factories.
Sony Corporation, struggling with dwindling earnings, says it will cut seven percent of its global workforce-- 4,000 jobs in Japan and 6,000 in the rest of the world-- during the next few years.
The conglomerate's first non-Japanese chief executive, Howard Stringer, announced a massive restructuring plan. It includes closing 11 of Sony's 65 production bases worldwide and selling more than $1 billion worth of non-essential assets such as real estate.
Mr. Stringer says the company plans to focus its attention on its key product lines.
"But without question the revitalization of electronics is our number-one priority," Stringer said.
Another surprise revealed by Sony executives is that the company expects to post an operating loss of about $200 million for this year.
Previously Sony had forecast an operating profit of nearly $300 million.
Sony President Ryoji Chubachi, who also runs the electronics division, concedes the company was not making products that consumers wanted to buy and that Sony's technological skills have fallen behind innovative competitors.
Mr. Chubachi says it is time to revitalize Sony worldwide. He says the company now will focus on its top products, such as the Playstation game console, liquid-crystal display television sets, and its Walkman brand portable music players.
The immediate reaction from some analysts has been to call the plan moderate, noting that many investors expected more drastic cutbacks.
Mr. Stringer's predecessor, Nobuyuki Idei, cut 20,000 jobs and slashed fixed costs under a three year restructuring plan.
Sony, a pioneer in consumer electronics, has been losing market share for years to Japan-based competitors such as Sharp and Matsushita and overseas rivals, notably South Korea's Samsung.
