Sony Forecasts First Annual Net Loss in 14 Years Jan 23, 2009

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Sony Corp. announced that it will close out the year with an operating loss for the first time in 14 years.

Sony Corp. said it expects to report an operating loss of 260 billion yen (approx. US$2.8 to $2.9 billion). Sony attributes its loss to three factors: a surging yen, the impact from the decline in the Japanese stock market, and an increase in expected restructuring charges.

The company said it would cut about 1000 Japanese contract workers as it closed design and manufacturing operations at its plant in Ichinomiya, Japan, and consolidated production at a plant in Inazawa. It will also start an early retirement program "supporting employees to take up new opportunities beyond the Sony group" and said it was planning a "significant reduction" in marketing and other expenses. The early retirements may include some of the job cuts announced in December, when Sony said it would lay off 8000 workers and close as many as six plants.

The company said that for the current fiscal year, it expected sales to fall 13% from last year.

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