Sony to suffer $1.1 billion loss - report
Global economic downturn and poor sales speculated to hit the electronics business hard
Sony is likely to announce an annual operating loss of around USD 1.1 billion, the company's first loss in 14 years, due to weak sales and the impact of a stronger yen.
The electronics giant had previously estimated a JPY 200 billion (USD 2.2 billion) profit but the global economic downturn dampening consumer spending on high priced products has hit Sony hard, according to Reuters which references "a person with knowledge of the matter".
This news follows earlier reports that the company was set to cut full-time staff by 8000 and 16,000 jobs before 2010 in a bid to reduce costs, however, if Sony does post a USD 1.1 billion loss, executives are expected to take even more drastic action.
"Sony could reduce the number of products it offers, and it may also have to consider selling off its financial unit," JPMorgan analyst Yoshiharu Izumi said.
"Even though external factors are the main reason (for the likely loss), the management team is partly the cause for the long delay in turning around its TV business," he added. "They may have to take responsibility for that since the company is cutting personnel now."