Sony's Stringer Struggles

Sony Chief Executive Sir Howard Stringer is apparently facing an internal struggle with the company's "old guard" over his plans to dramatically restructure the Japanese electronics giant.

Sony revealed earlier this month that it would be reporting a $1.1 billion loss for fiscal 2008, its first loss in 14 years and only the second since the company went public in 1958. As a result, Sony was expected to announced closures and layoffs that would leave 16,000 employees without a job. But that plan has apparently run into resistance from an "old guard" of managers in the company's electronics division.

The crux of the dispute apparently arises from Stringer's belief that televisions have become a commodity, and that Sony should therefore cut its production costs "and rely more on sales of software built into its gadgets." Eliminating Japanese employees who believe they have "a job for life" is also a major concern, but exempting them from layoffs runs the risk of angering Sony workers outside of Japan, particularly when, according to one Sony U.S. manager, there is "a lot of fat" in the Japanese operation.

Sony has already announced the shutdown of factories in the U.S. and France, and more closures are expected in the near future. "Sony's electronics business is bleeding very badly," said Nikko City analyst Kota Ezawa, an analyst at Nikko Citi in Tokyo. But Sony employees predictably see things in a different light. "We used to get the message, 'Make a high-quality product'," said one former Sony engineer. "Now we don't know what we should be doing, except maybe not spending any money."

Source: Financial Times