Sony expected to post first loss in 14 years

Author: Joe Martin
Published: 13th January 2009
Comments (18) Stumble
Sony expected to post first loss in 14 years

Sony is expected to announce massive losses shortly, for only the second time in the history of the company.

Sony is expected to announce an operating loss of over £684 million GBP for it's 2007 - 2008 financial year soon according to Nikkei, the Japanese business daily.

The loss could be set to double too, depending on inventory conditions in the first quarter of 2009, Reuters reports.

The anticipated loss goes directly against Sony's financial predictions as well, which forecast that the company would make an operating profit of £15 million GBP this year - an estimate which was down on the year before.

In preparation for the loss Sony announced back in December that it would be curbing future investments and pulling out of some businesses in order to save around £600 million GBP per year as the recession loomed. The company also announced that it would lay-off large numbers of staff from a selection of sectors. A total of 16,000 employees are expected to be laid off.

No matter how large the loss is though it'll still be only the second time that the company has operated at a loss since it went public in 1958 and the only time that it has been caused by the electronics division. The only loss the company has faced before has arisen from one-time charges in the company's film sectors back in 1995.

This time however the fault is levelled clearly at the performance of Sony's electronics sections, with the PlayStation 3 in particular racking up massive losses for the company.

Sony's shares fell by 1.5 percent yesterday in expectation for the announcement.

Discuss in the forums.
Quote liratheal 13th January 2009, 11:41
I can't imagine that they were expecting much better than this.

That said, that is a rather large amount of money..
Quote Bauul 13th January 2009, 11:44
Well the Consumer Electronic sector suffered it's first decline in like 20 years last year, so it's no surprise a company like Sony, that launches products like the PS3 that so much rely on people having lots of spare cash for high end electronic equipment, is suffering as a result.
Quote n3mo 13th January 2009, 15:21
Always good to hear about big company losing money.
Quote mikeuk2004 13th January 2009, 16:29
Quote:
Originally Posted by n3mo
Always good to hear about big company losing money.

So its good to see lots of people become unemployed and familes suffering.

Your nice.
Quote rollo 13th January 2009, 17:56
another 16k jobs gone

dang the world is in freefall
Quote rollo 13th January 2009, 19:29
as a old friend of mine said before he got fired

theres no such thing as a 100% secure job

so n3mo either lives of state or is still school ?
Quote LeMaltor 13th January 2009, 20:06
They won the format war, presumably there is profit to come in the years ahead?
Quote freedom810 13th January 2009, 20:30
Seems like alot of money to us but I bet to a mega corporation like sony that isnt all that much...they are selling luxery items too, and times like these people dont buy luxery..
Quote Bladestorm 13th January 2009, 22:34
Quote:
Originally Posted by LeMaltor
They won the format war, presumably there is profit to come in the years ahead?

They beat HD-DVD to be the souped-up dvd, higher resolution movie format for now, but they have yet to convince much more than the wealthy and the early adopters that there is a point in switching to blu-ray over dvd and to make profit they absolutely need to do that before a true next generation tech comes along and renders it truely obsolete, which may or may not be before they have turned a profit.
Quote Otto69 13th January 2009, 23:34
Aside from a few things like the PS3, Sony electronics has been garbage for a decade or more. There was a time when Sony meant "quality" but that was a long long time ago.
Quote devdevil85 14th January 2009, 01:04
Quote:
Originally Posted by Otto69
Aside from a few things like the PS3, Sony electronics has been garbage for a decade or more. There was a time when Sony meant "quality" but that was a long long time ago.
I have seen many Sony products in the past year (an HD camera, a new Bravia, an Mp3 player) that people (I know) have purchased and I was able to experience myself and they were all very high quality and what I expected from a Sony product. I don't know about your experience though.
Quote Aragon Speed 14th January 2009, 01:37
Considering the state of the worlds finances ATM, this is hardly surprising news. :(
Quote n3mo 14th January 2009, 08:23
Quote:
Originally Posted by rollo
as a old friend of mine said before he got fired

theres no such thing as a 100% secure job

so n3mo either lives of state or is still school ?


Last company i worked in seemed rock stable, until it was eaten by a bigger one and everyone got laid (off). Then I did some freelancing in uk and currently I have a company of my own (two actually), so I should know about job security.

My dislike of big companies is caused by their inclines towards giving their customers crap and calling it roses but is also more personal - as my company is small, our biggest issue are the bigger ones doing everything they can to wipe out the smaller, usually balancing on the borderline of law or crossing it severely and relying on their high-paid lawyers.

So as much as I feel for the workers of Sony (or any other company), I am not going to cry over it. Big company in trouble is almost always good news for the smaller ones, but also for customers (price cuts, more competition on the market).
Quote Joe 14th January 2009, 09:03
When i saw the words loss and Sony - console-fail immdeatly poped into my mind. But then again everybody is suffering ...

16k workers being told to go home ?! Wonder what type of workforce this will be or if it is going to be mixed.
Quote [USRF]Obiwan 14th January 2009, 10:20
Whats weak with the large company's is that it goes well for 15 years and if they loose some money in year 16, thousands of employees have to go. The same employees that worked their asses to keep the company healthy for 15 years. A smart company would have build up a reserve for that 15 years to compensate for the bad years and pay employees out of the reserve.

they should kick some of staff or a bunch of managers out, because every one member of the staff has probably the same salary in a month that 500 employees make in a year. (not counting the enormous bonuses they get each year)

Its a goddamn shame it goes this way.
Quote Penrhos 14th January 2009, 13:35
Well if Sony give them a PS3 as part of the severage package that'll be another 16,000 units moved and give them something to do while they look for another job.

Hell they might as well throw in a Sony HDTV as no-one going to be buying them anyway if the recession bites any deaper.
Quote pendragon 14th January 2009, 17:48
on the ond hand, as I don't really care for Sony as a company, this is 'good news', on the other hand I feel bad for those 16,000 people :( sucky time to lose your job
Quote DXR_13KE 16th January 2009, 14:09
this is happening to everyone everywhere...

edit: the sink hole is getting near!!
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