Sony to Spin-Off Consumer AV Unit in 3 Year Turnaround Plan

Sony outlined its latest three year turnaround plan this week, which will see the company spin-off its video and sound business in October 2015. The unit is responsible for Sony’s home audio products, including Blu-ray disc recorders and players and memory-based portable audio devices. The move follows last year’s decision to sell its Vaio PC business to Japan Industrial Partners and split out its TV business and operate it as a wholly-owned subsidiary (Display Monitor Vol 21 No 6).

The latest corporate strategy plan divides Sony’s business units into three categories. “Growth drivers” include video games and devices such as image sensors, “stable profit generators”, which include digital cameras and audio equipment, and “areas focusing on volatility management”, which covers Sony’s TV and smartphone businesses.

Sony is targeting an operating profit within three years of $4.2 billion but said it will not target sales, focusing instead on profitability and growth. CEO Kazuo Hirai said that the company will consider spinning-off other units, such as computer chips and batteries and will also invest in innovative areas, including through acquisitions and partnerships, without giving any further details. Sony still sees its film division as a driver of growth.

Earlier this month, Sony narrowed its annual net loss forecast to ¥170 billion ($1.4 billion), having previously said it expected to record a net loss of ¥230 billion ($1.9 billion) (Sony Cuts Loss Forecast but Also Cuts More Jobs). At the same time Sony announced a further round of job cuts in its mobile business. An additional 1,100 employees are to lose their jobs, on top of the previously announced 1,000 staff cuts. The business has now seen its workforce reduced by one third.