Sony reports $1 billion annual loss, first in 14 years

By on May 14, 2009, 12:28 PM
Just as analysts predicted, the global recession has hit Sony hard, with the company reporting its first annual loss in 14 years. It lost 98.9 billion yen, or about $1 billion, in the fiscal year through March 2009 and projected it would lose even more money this year amid a slump in consumer demand for electronics goods. This is in sharp contrast to profits of more than $3 billion recorded a year earlier by the electronics giant.

Sony is pushing through a restructuring program in order to get their finances back on track, which involves the closure of eight factories and eliminating some 8,000 jobs by year's end, mostly through forced retirement. The path to recovery is not one that will happen straight away, though, as Sony has projected a 120 billion yen ($1.2 billion) loss for the fiscal year through March 2010.

Like several other Japanese companies, their business has been hurt by the strong yen which makes exports more expensive. The company saw a sales drop in each segment. Electronics sales for instance, usually Sony’s bread and butter, were down 17 percent, while its gaming segment took an 18 percent hit despite stronger PlayStation 3 and PSP sales this year. Revenue from Sony Ericsson Mobile Communications, the company's mobile phones joint venture with Ericsson, also fell by 19 percent on account of lower volumes.

User Comments: 3

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PanicX said:
It's going to be interesting to see how Sony deals with this. From what I understand, the working culture in Japan is very different then abroad. Companies there sooner go bankrupt than layoff employees.
gobbybobby said:
I don't think sony will go out of business, I have seen 3 sony center retail store open in the last year in my area, they are still expanding. I got my PS3 at christmas!
9Nails said:
This is a wake-up call for Sony. I anticipate a round of musical chairs followed by people cheering and a reversal of fortune.They suffered a 16.4% loss in pictures, 17% loss in their electronics, 18% loss in games, 19% loss in Sony/Ericscon. Sony music suffered a 16% loss, but they were able to put a spin in this by consolidating Sony / BMG figures to show a profit. Sony took most of the beatings from USA and Europe, in areas where the value of the yen has dropped. But only suffered smaller 9% losses on their home turf.
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