Sony, under pressure to shore up profitability in its electronics business, unveiled a restructuring plan on Thursday that will cut 5,000 jobs and trim 100 billion yen ($988 million) a year from fixed costs, while splitting off its loss-making PC and TV units.
The PC division, as widely expected, will be sold to investment fund Japan Industrial Partners, which will set up a separate company to take over the operations. Sony will initially hold a 5% stake in that company.
Sony also said it will split its TV division off into a separate company by July 2014. The flagship TV division has lost $7.5 billion over the last 10 years.
The job cuts, which will include its TV and PC divisions, are to be implemented by March 2015, while the cost savings are to kick in by the following 2015-16 financial year.
The pullout comes as Japan’s electronics firms look for daylight beyond the shadow of industry giants like Apple and Samsung Electronics. Exiting the Vaio PC business Sony, founded 17 years ago, will mark the first time CEO Kazuo Hirai pulls a major consumer product line.
Still unclear is when Sony can catch up with local peers Panasonic and Sharp on the restructuring track. The pair have swallowed charges, sold off or cured many loss-making businesses, and bounced back to strong profits.