2100 Smartphone Division Job Cuts At Sony Corp (ADR) (SNE)
Sony Corp (ADR) (NYSE:SNE) plans to reduce the headcount in the company’s smartphone division in an effort to save on costs and bolster performance in the segment. The job losses are expected to happen mostly in Europe and China. The company had already trimmed 15% of its mobile division headcount last year, in an effort to restructure the unit for performance improvement.
Job cuts to bolster cost-savings
Sony Corp (ADR) (NYSE:SNE) is expected lay off some 2,100 employees in its mobile unit by the end of March next year. The company hopes that the headcount reduction in the mobile division will help return the unit to profitability. Sony anticipates millions of dollars in cost savings by the end of March 2016 following the staff restructuring in the mobile division. Last year, Sony moved to cut 15% of the jobs in the mobile unit.
Lower smartphone sales outlook
Performance in Sony Corp (ADR) (NYSE:SNE)’s smartphone division has declined in the recent times. The company anticipates lower unit sales in the current fiscal year and a huge operating loss of about $1.83 billion. For the full-year ending March, Sony downgraded the outlook for smartphone sales to 39.2 million units, below 41.0 million units forecast in October. At 39.2 million smartphone sales, the company anticipates flat growth from the previous year.
46% uptick in operating profit
In the latest quarter, Sony reported 28.7% increase in sales and operating revenue in the smartphone division. An operating profit of $76 million was recognized in the mobile unit, representing a 46% uptick. The company sold 11.9 million smartphones, above 10.7 million phones sold in the comparable quarter a year earlier. Performance in the latest quarter, 3Q, was also helped by favorable exchange rates.
$15 million to restore Sony Pictures
Sony Corp (ADR) (NYSE:SNE) disclosed that it would incur a cost of $15 million to correct the damages caused by the massive hacking of its system last year. The company will use the money to investigate and remediate Sony Pictures system. Sony further said that it doesn’t expect the cost of correcting the hacking damages to have any material impact on its full-year results.
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