Sony to announce restructuring details soon: FT
TOKYO (Reuters) - Sony Corp will announce details of its restructuring plan this week amid internal company resistance to job cuts in Japan, the Financial Times said on Wednesday.
The maker of Bravia LCD TVs, Cyber-shot digital cameras and PlayStation game consoles outlined plans last month that called for curbing investment, closing five to six plants and cutting 16,000 jobs to save $1.1 billion a year in costs.
But analysts and other industry watchers have said Sony will likely need more drastic measures to fight a crippling appreciation in the yen and a sharp slowdown in demand for electronics as the global recession spreads.
"Sony's not in a position to halt all domestic production but it has to do something that drastic," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
"If it announces plans to move production overseas while keeping only planning and development functions in Japan, that would be a positive."
Sony earns more than three quarters of its revenues overseas.
In December, Sony said it would reduce headcount by 8,000 regular workers worldwide and by an equal number or more of contract workers.
But analysts say drastic measures at home would not only meet with stiff opposition from within the company, but also political resistance as well.
The Financial Times reported Sony will unveil details of its restructuring steps on Wednesday or Thursday. It said Chief Executive Howard Stringer was meeting with resistance from some executives to shifting the company's focus to software from hardware and cutting jobs in Japan.
Sony spokesman Atsuo Omagari declined to comment on the report.
Sony in October cut its annual operating profit forecast by 57 percent and said profit would fall further if the yen's strength persists.
A source said this month the company will likely suffer an annual operating loss of about $1.1 billion, its first such loss in 14 years.
A stronger yen makes Japanese exports less price competitive and eats into overseas revenues when converted into the Japanese currency.
Sony shares were down 1.2 percent at 2,000 yen in afternoon trade, roughly in line with the benchmark Nikkei average.
(Editing by Edwina Gibbs)
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