More woes for the Japanese giant as top brass accept cuts in a bid for atonement after 10,000 job cuts and $5.7 billion losses
Following announcements of major staff restructuring and record losses, Sony bosses have agreed to take a pay cut.
Seven of the most senior Sony officials, including CEO Sir Howard Stringer and president Kazou Hirai, have agreed to forgo lucrative bonuses and take a cut to basic pay. The value of the bonuses and cuts was not revealed in a letter to shareholders.
According to a report in the Financial Times, the seven execs will return all of their performance linked compensation for fiscal 2011, in a bid to placate shareholder following plummeting market values and net losses of $5.7 billion.
The decision to cut bonuses and pay is thought to be in recognition of the firm’s precarious position, and is arguably overdue following the decision to slash the jobs of 10,000 staff worldwide.
Sony has struggled to maintain profitability with the likes of Samsung stealing its thunder, and recently saw its market value reduced to the lowest since it began to dominate the consumer electronics market back in the early eighties with the release of its Walkman.
The firm has recorded losses for the past four years, with its TV business in the red for the last nine. The ailing LCD business has been a major factor in the downturn in the Japanese firm’s fortunes, compounded by a strong yen and the disastrous effects of the tragic tsunami last year.
With the domestic Japanese TV market having slowed dramatically, alongside tough competition from the Korean panel makers, Sony has been in trouble for a while.
According to analysts speaking to TechEye part of the problem with the flatscreen business is that rivals such as Samsung still produce their own panels, while Sony “missed the boat” by exiting production too soon.
There is some cause for optimism on the horizon, however, with Sony rumoured to be teaming up with domestic rival Panasonic to develop OLED screens, an area of the market with the potential to drive more profitability.
Sony has also been busying itself at the E3 conference as it attempts to strengthen its video games business.