Sony expected to slash costs as heavy Q4 losses are predicte

New Sony chief executive Howard Stringer may be poised to make further major cost cuts at the giant company, with analysts anticipating that the firm will post its largest loss in two years for the quarter ending March 31st. That's according to a Bloomberg report which surveyed a number of market analysts and arrived at a median forecast of a 70.3 billion Yen (506 million Euro) loss in the fourth financial quarter.

Stringer, the first non-Japanese CEO of Sony, was noted for cutting back on headcount and costs as head of the company's US operations, and has already pledged to follow through with former CEO Nobuyuki Idei's three year cost-cutting plans, announced in late 2003.

That plan involves reducing the overall headcount by 20,000 by early 2007 - representing a drop of 12 per cent in the company's staffing numbers - and reducing the number of suppliers used by the company to 1000, from its current levels of 4700. However, analysts believe that Stringer may accelerate these plans in order to allow for a possible slowdown in the US economy - while devices like the PlayStation Portable are also pegged as being crucial for Sony in order to differentiate itself from rival electronics firms in the current market climate.

It also remains possible that the British-born CEO will choose to follow a more drastic route entirely, by spinning off the company's hardware business into a separate entity - thereby allowing the semiconductor and consumer electronics divisions to seek capital funding separately from the core media and software business.

News source: gamesindustry.biz

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