Sony confirms sale of PC biz, 5K jobs to be cut

Sony confirms sale of PC biz, 5K jobs to be cut

Summary: Japanese electronics giant announces plans to "reform" its PC and TV businesses, which will include the sale of its Vaio portfolio to Japan Industrial Partners and headcount slashed by 5,000.

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TOPICS: PCs, Laptops
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Sony confirms it has inked a deal to sell its Vaio laptop unit to an investment fund, as part of a strategy to accelerate the "revitalization and growth" of its electronics business which willl also see its headcount slashed by 5,000. 

The Japanese electronics giant said in a statement Thursday that Japan Industrial Partners (JIP) will buy over its PC business, marketed under the Vaio brand, but gave no details on how much the deal would be worth. Sony explained that the move was necessary amid "drastic changes" in the global PC market, and the "optimal solution" that would allow the company to focus on its mobile offerings encompassing smartphones and tablets.

JIP will set up a new company following the buyout, which is expected to focus its efforts on selling consumer and enterprise PCs in Japan, optimizing its sales channels and operations, as well as assessing the potential of expanding into overseas markets. Some 250 to 300 employees are expected to be transferred to the new company, including those involved in planning, design, development, manufacturing, and sales. 

Sony assured that customer support would remain unaffected. "As a part of the business transfer to JIP, Sony will cease planning, design and development of PC products. Manufacturing and sales will also be discontinued after the Spring 2014 lineup to be launched globally. Even after Sony withdraws from the PC market, Sony customers will continue to receive aftercare customer services," the company said. 

Today's move is part of the company's "reform strategy" across its electronics business previously announced in April 2012, during which it determined that its TV and PC businesses will no longer be profitable. It will spin off its TV division into a separate subsidiary by July 2014, in hopes of improving this unit's profit structure and return the business to profitability, Sony said. 

While some employees affected in the PC sale might be transferred to other units within Sony, an estimated 5,000 jobs from the restructuring, including of its TV business, will be cut by the end of the company's fiscal 2014. Some 3,500 of these will be personnel in its overseas outlets, while the remaining 1,500 will be from its local office. 

Sony expects to fork out 20 billion yen (US$196.29 million) to roll out the restructuring plans in fiscal 2013, and another 70 billion yen (US$690.05 million) by fiscal 2014. The company expects the restructuring measures to slash its annual fixed costs by over 100 billion yen (US$986.47 million) from fiscal 2015. 

Topics: PCs, Laptops

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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  • Sony confirms sale of PC biz, 5K jobs to be cut

    the decline of sony may be attributed to changing market dynamics but i believe the 2005 rootkit debacle has more to do with the loss of consumer confidence in anything made and marketed by sony. good luck to them ...
    kc63092
    • Shut Down

      It sounds more like a shutdown of the Vaio products than the sale of the division. I also noticed they are shutting down the TV business. Is the company liquidating. Am I missing something?
      MichaelInMA
      • Probably

        Sometimes investment fund companies buy a division like Vaio to liquidate or reorganize into a leaner operation. Most likely scenario is Vaio will become a brand symbol and that the PC's that retain that name will most likely be of cheaper quality in order to make a better profit.
        Another possibility will be that the investment company will simply try and operate the Vaio line with drastically reduced overhead possibly reducing the PC line significantly and try and make cheaper and more affordable PC's and Tablet's. I think to some extent Apple is facing a similar trend with Mac's. Less people can justify spending so much on a premium computer anymore when their are so many cheaper alternatives.
        JohnnyES-25227553276394558534412264934521
        • I can think of a few things they could do

          Removing a lot of that crappy Sony software and services and offering traditional services from MS, Google and apple for common user tasks like music, email, documents, storage, communication and backup would be a good start.

          It also wouldn't hurt to look at why they seem to have to charge a premium price for what appear to be average build quality computers.
          mrefuman
        • Also

          The are getting rid of TV's and overseas stores. Considering this is Japanese company I assume overseas is the US also. This is where most of the personnel cuts are coming from and not Vaio. I think the headline kind of lost the association.
          MichaelInMA
        • Try again Mr. Microsoft drone.

          I guess you haven't followed the news lately.

          http://appleinsider.com/articles/14/01/09/apples-domestic-mac-sales-surge-285-as-overall-pc-market-shrinks-75
          Arm A. Geddon
      • A Sony that doesn't make TVs?

        That doesn't look so good.
        John L. Ries
      • Sony has not made money on TVs for over a decade

        It is no secret that Sony TV division has been in the red for over a decade. They have not been able to make a profit on it for a very long time, but they need it as it is a showcase product for much of their other lines.
        warboat
  • Premium no more

    The decline of companies like Sony simply means unless your willing to accept razor thin margins you might as well stop selling PC's and TV's. I can remember when Apple's Steve Jobs told of how he admired Sony and wanted that same business model. To sell premium quality and reap the higher margins. Now because so many consumers are being more frugal the advantage today is in price not quality. Every time I shopped for a PC I considered Sony's Vaio lineup. Unfortunately I always chose a cheaper model from another PC maker who offered similar hardware for less.
    JohnnyES-25227553276394558534412264934521
    • Sony Vaio laptop internals

      Toshiba and Sony laptops were very good once upon a time. Premium quality components. A Toshiba laptop had only Toshiba HDDs, Toshiba floppy drives, Toshiba CD/DVD drives, Toshiba LCD panels and Toshiba keyboards. Same with Sony except for the HDD part. Today both contain Chinese made components from other manufacturers. Just go to the Device Manager on a Toshiba or a Sony laptop to find out who made the internals. So why pay more for the same?
      GoForTheBest
    • It's competition from China...

      "The decline of companies like Sony simply means unless your willing to accept razor thin margins you might as well stop selling PC's and TV's."

      The Chinese can afford to, and when their labor becomes too expensive the market will turn to North Korea next. This is not a good trend, yet it is happening globally. I would pay $100 more to a company who treated their employees like human beings instead of chattel. The blame lies at Steve Jobs' (and Bush's) doorstep, as he took outsourcing major league.
      redpriest1
      • Bush hasn't been president

        for 5 years, now. The current president had veto proof majorities in both house and senate for two years. If you think there are too many jobs overseas, Bush isn't the one you should be blaming.
        baggins_z
    • And yet Apple's computer

      line showed year over year growth while maintaining over 35% margins. So, obviously, you can sell high-margin computers successfully.
      baggins_z
  • Exceptional in many ways

    Just 7 years ago, I bought my daughter a VAIO laptop (at her request) when she went off to college. As kids often do, she beat the thing to death, failed to update the antivirus software, etc. Ta the end of her freshman year, I sent it back to Sony for repairs. In about 10 days they returned a perfect, like new machine. My point is that this is yets another case of the failure of a premium made AND premium priced product to survive (unless it is a Mac!). While my daughter has moved on to a Mac, the VAIO and Sony's service department served her well during college - and I still use that laptopm for minor tasks at home. I mourn the loss of yet another quality product, done in by the Wal-Marting of the marketplace.
    gary.lipkin
  • I hope someone picks Vaio up

    My sony Vaio pro 13 is the best laptop I've ever owned and that includes a MacBook Pro. It is blazing fast, has a great touch screen and keyboard and is really light weight. I've looked around and haven't seen anyone in the PC world match this unit. I see it and the MacBook Air as head and shoulders above everyone else - and for my needs, I put it above the air.
    larsonjs