to join the CVG community. Not a member yet? Join now!
CVG
News

Sony's entertainment arm looking to make $100 million in cuts, report claims

Report claims cost-cutting measures are likely to result in job losses

Sony has reportedly hired management consulting firm Bain & Company to identify where it can make $100 million worth of cuts in its entertainment unit.

Bloomberg reports that Sony CEO Kazuo Hirai will host a conference in Culver City, California on November 21 to discuss the company's cost-cutting strategy. It is believed that the meeting will result in job losses in the company's entertainment arm.

Zoom

In addition to the PlayStation business, Sony's entertainment unit includes film, television and music divisions.

In August, Sony rejected a proposal to break up the business. Hedge fund manager Daniel Loeb, who owns seven per cent of the electronics empire, had requested splitting Sony Entertainment away from Sony Electronics, arguing that the divisions were obscuring each other's value.

However, Sony rejected the proposal by unanimous vote: "Sony's Board and management believe it has adequate capital resources to fund its business plans," it said in a letter to Loeb.

"Should Sony require capital, or in the event of unanticipated events, the company's priority would be to raise capital without selling a portion of an asset fundamental to the growth strategy, and without unnecessarily burdening Sony's ability to execute its business strategy for both entertainment and electronics."

Sony's shares dropped in value by about five per cent following this, but Hirai remained optimistic and dedicated to his vision.

"We are encouraged by our progress as we continue to execute on our One Sony strategy," he said. "We have made many changes during my tenure as CEO, and we are confident that we are on the right path. Sony's entertainment businesses are critical to our corporate strategy and will be important drivers of growth.

"I am firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses."

The PS4 is now available in North America and is scheduled to launch in Europe and Latin America on November 29. PS4 sales hit one million units in 24 hours of availability.

Comments