Incoming Sony chief predicts aggressive supply chain cost-cutting drive
FMCG SUPPLIER NEWS
ProcurementLeaders.com - Feb 16th, 09:30
New Sony chief executive officer has warned that cost-cutting is a priority in the company’s TV business and supply chain as the company counts the cost of a fourth consecutive annual loss.
“We have to make some hard decisions on where there are redundancies and reduce the fixed costs in a variety of different areas,” said Kazuo Hirai, the incoming CEO who replaces Howard Stringer on April 1st.
Japan’s largest-consumer electronics exporter is looking to save money at its local operations and in the US and Europe, Hirai said. The cost-cutting also may affect suppliers and manufacturers for Sony, which has had its credit ratings cut by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings since December.
“That’s a hard, painful decision that we need to make but the right one for business,” Hirai said without elaborating. “I don’t make them easily.”
Sony, once worth $100bn, is now worth $20bn, according to data compiled by Bloomberg. Shares fell 0.5% to 1,536 yen in Tokyo today, trimming the gains this year to 11 percent. The stock tumbled 53 percent last year.
The maker of Bravia televisions more than doubled its annual loss forecast last week to 220bn yen ($2.9bn), blaming a stronger yen, production setbacks due to floods and the cost of exiting a display-panel venture with Samsung. The company may drop its less-competitive businesses, Hirai said last week without elaborating.
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