Sony Restructures, alarmist headlines written, nothing really changes

Discussion in 'Video Games and Technology' started by Omega Supreme-1, Feb 28, 2009.

  1. Omega Supreme-1

    Omega Supreme-1 Autobot Sentinel

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    Bloomberg.com: Technology

    Feb. 27 (Bloomberg) -- Sony Corp. Chief Executive Officer Howard Stringer ousted Ryoji Chubachi as president and took control of the main electronics business as the maker of the PlayStation 3 and Bravia televisions faces a record loss.

    Stringer, 67, will assume the expanded role from April 1, Tokyo-based Sony said today. Chubachi, 61, will become vice chairman in charge of product safety, quality and environmental issues.

    The reassignment of Chubachi, a 32-year veteran at Sony, may help clear the way for Stringer to reorganize the company as the global recession erodes sales. Sony is cutting 16,000 workers and shutting plants to weather a slump that forced the world’s second-largest maker of consumer electronics to forecast a record 260 billion yen ($2.7 billion) full-year operating loss.

    “The Japanese can’t take decisive actions toward their comrades during hardship,” said Yuuki Sakurai, general manager of financial and investment planning at Tokyo-based Fukoku Mutual Life Insurance Co., which manages $54 billion in assets. “As a non-Japanese without such loyalties, Stringer is better positioned to conduct the large-scale restructuring that Sony has to do.”

    Sony rose 2 percent to close at 1,668 yen on the Tokyo Stock Exchange before the company’s announcement, while the Nikkei 225 Stock Average climbed 1.5 percent. The stock fell 69 percent in 2008, after gaining for four straight years.

    Non-Japanese Head

    Stringer, a Welsh-born U.S. citizen, became the first non- Japanese to head Sony when he was appointed in June 2005. Before joining the electronics maker in May 1997, Stringer was president of CBS Inc., where he stayed for three decades, and chief executive officer of media and technology company TELE-TV.

    Chubachi spent much of his career at Sony working in the recording media business and was instrumental in developing the 8-millimeter video camera, according to the company’s Web site. He became president in June 2005.

    “Chubachi personifies Sony’s enthusiasm for hardware, while Stringer represents its software focus,” Sakurai said. “The company has now concluded it can’t focus on both.”

    Stringer said in December 2007 he plans to connect Sony’s flagship PlayStation 3 console with its other electronics such as mobile phones as part of a growth plan starting this fiscal year ending March 31. The strategy builds on plans by Nobuyuki Idei, who Stringer replaced amid investor discontent over failure to meet business targets.

    New Groups

    The company said today it will combine its VAIO personal- computer, Walkman and Sony Computer Entertainment game businesses in the newly formed Networked Products & Services Group to focus on creating gadgets that can work with each other and connect to the Internet. Kazuo Hirai, 48, who’s in charge of the game business, will head the new division.

    The Bravia liquid-crystal-display televisions, Cyber-shot digital-camera, and audio and video operations will come under the New Consumer Products Group. Hiroshi Yoshioka, 56, who now heads the TV unit, will take charge of the division, Sony said.

    The electronics maker said it will also create a software and technology team and a manufacturing and procurement team across divisions to bolster connectivity of products and services and save costs.

    “These moves are bolder than we had anticipated and are positive,” Hitoshi Kuriyama, an analyst at Bank of America Corp.’s Merrill Lynch & Co., wrote in a report. “We believe the new management and organization will be effective in bringing out Sony’s potential in this new networked age.”

    Cost Savings

    The reorganization will allow the company to save $3 billion in costs in the year starting April 1, more than the previously estimated $2.5 billion, Stringer said at a briefing in Tokyo.

    The new management team will face the challenge of reviving earnings when demand for electronics, computers and mobile phones is falling because of the recession. The company will probably be unprofitable until next fiscal year, according to the average of analyst estimates compiled by Bloomberg.

    “This is the worst recession of our lifetime,” Stringer said. “But in difficult times, there is opportunity.”

    Sony said its chip, electronic devices, and chemical and energy businesses, including batteries, will remain under its Semiconductor & Component Group.

    Sony Financial Holdings Inc., Sony Music Entertainment, Sony Pictures Entertainment and Sony Ericsson Mobile Communications Ltd., the company’s handset venture with Ericsson AB, will stay as separate entities.

    Further organization and personnel changes will be announced later, Sony said.

    “Sony has gone into emergency mode,” said Naoki Fujiwara, chief fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6.1 billion. “They know they have no time to waste and have to push even harder on their accelerator to speed up restructuring.”

    To contact the reporters on this story: Hiroshi Suzuki in Tokyo at Hsuzuki5@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
    Last Updated: February 27, 2009 06:07 EST

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  2. toma

    toma eskimo in disguise

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    so this probably doesn't mean anything as far as the playstation brand goes, it's just internal company restructuring?
     
  3. Rodimus Prime

    Rodimus Prime Sola Gratia, Sola Fide TFW2005 Supporter

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    I really don't see how it's R.I.P. for Sony, more of a transformation. A lot of companies are restructuring due to the mess the world's in.
     
  4. toma

    toma eskimo in disguise

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    i agree, it's not really gone until the playstation is gone. that's what's important.
     
  5. seeker311

    seeker311 The Collector

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    ok, ya gotta change the title cuz the article does not support it at all. Restructuring does not mean that SCE will be shut down, and hell they state that its being merged with another division to make it compatible with other gadgets. If anything, this will make the PS3 more practical as it will be adaptable to other gadgets.
     
  6. stuntacon1

    stuntacon1 Banned

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    i just got my ps3 and love it. i dont think with sony's success that they will stop ps3, or the bravia tv's.i am an apartment manager and with the way things are right now i had to do the same thing. it's just changeing things to save mony.
     
  7. Chrono Grimlock

    Chrono Grimlock Perfect By Nature

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    Well re-arranging apartments is different from restructuring an entire company or division in a company.
     
  8. stuntacon1

    stuntacon1 Banned

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    i was just using that as a medifore alot of restructoring is going on right now everyone is hurting
     
  9. Counterpunch?

    Counterpunch? Interior Renovator

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    Stupid thread title is stupid.
     
  10. Shin-Gouki

    Shin-Gouki Rebuilding Veteran

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    Sony is restructuring and as a result S.C.E. is under a broader banner instead of on it's own. It makes sense and is something that should have been done a long time ago.
     
  11. rattrap007

    rattrap007 Insert witty comment here TFW2005 Supporter

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    Love the new title :lolol 
     
  12. Omega Supreme-1

    Omega Supreme-1 Autobot Sentinel

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    It doesn't change the fact that SCE is dead, and it no longer has it's OWN dedicated department. Sony is now being led by an American, which is rare for a Japanese company. "Nothing really changes" is hardly accurate.
     
  13. Ziero

    Ziero TFW2005 Supporter

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    I read this and laughed, cause I instantly thought of how this is the exact opposite of the situation in the 80's movie Gung Ho starring Michael Keaton. :lol 
     

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