Sony to sell Vaio unit, downsize TV division

Sony is aiming to lay off around 5,000 employees by March 2015, sell its Vaio PC unit, and split its TV division as it struggles with financial losses. The company has issued a fiscal warning of a loss of 110 billion yen, in contrast to a previous forecast of a profit of 30 billion yen, for the current fiscal year ending in March.

The layoffs are expected to affect 3,500 employees outside Japan and around 1,500 in the country. The company will start to offer redundancies, potential transfers, and early retirement as the company looks forward to trimming its cost before its 2015 financial year starts.

Meanwhile, the Vaio PC unit is reported to be sold to Japan Industrial Partners, a private equity venture that specializes in turnarounds and buyouts in manufacturing. Japan Industrial Partners said that it aims to reach an agreement by the end of March to buy Vaio from Sony.

Sony has cited “drastic changes” in the computer market as it plans to restructure its TV, PC, and other business divisions. Both Sony and Japan Industrial Partners said that a new company will be established once the Vaio deal is finalized.

The restructuring is expected to cost Sony 90 billion yen over the next two years, but if Sony plans to keep its PC and TV units, then it would also cost them over the long run. The company has often been criticized for having too many units as it is a small player in the global PC business. In the TV division, Sony has been losing money over its Bravia TV operations.

Sony stated that it would stop planning, design, and development of PC products and would focus on its lineup of tablets and smartphones as well as its game consoles. Kazuo Hirai, Sony’s Chief Executive, said that the company’s moves aimed to accelerate the revitalization and growth of their electronics business. However, there is the question as to whether such products can sustain Sony’s growth over a long-term period.

Mitsushige Akino, analyst at Ichiyoshi Investment Management noted that it appears that Sony still has no clear business direction and that the company will face tough times in the near future. Sony has struggled in recent years and has identified gaming consoles, digital imaging, and mobile as the units that it hopes will lead to a turnaround in its electronics business. This projection appears to be well-founded as the company has seen record sales of its new PlayStation 4 console as well as high sales of its Xperia smartphone brand.

Another area that Sony may work on as its exit strategy is in its development of advanced sensing technologies. Sony is already the world’s leader in MEMS and CMOS image sensors. Additionally, at the International CES last month, Hirai talked about future sensing technologies that can capture “unseen” data and enhance human perception and insight. He also talked about the potential of sensing technology in areas such as automotives, skincare, agriculture, and medical monitoring.

About the Author- This article is contributed by Martini Tech Inc., a nanotechnology company based in Tokyo, Japan and specialized in sputtering and thin-film deposition, nanoimprint mold and replica, MEMS design and MEMS foundry services and patterned sapphire substrates for LED applications.