April 10th, 2012
09:54 AM GMT
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(Image credit: Getty Images)

(CNN) – Troubled Japanese electronics giant Sony says expected losses for the year ended March 31 will be more than double earlier forecasts.

In a statement Tuesday, Sony said it would lose 520 billion yen ($6.4 billion), compared to the 220 billion yen ($2.7 billion) it predicted in February.

This would be the company’s fourth consecutive year in the red, presenting a tough “honeymoon period” for incoming CEO Kazuo Hirai (pictured), who succeeded Howard Stringer at the helm on April 1.

Sony blamed tax expenses - approximately 300 billion yen ($3.6 billion) - related to its assets in the United States.

“This additional tax expense is a non-cash charge and does not have any impact on Sony’s consolidated operating income (loss) or cash flow,” its statement read.

Analysts had forecast a full-year loss of 214 billion yen, according to Thomson Reuters.

Earlier media reports Tuesday suggested Sony is preparing to cut its workforce by 10,000, or 6% of its global headcount, as part of a restructuring plan.

According to the Financial Times, the cuts are to be announced on Thursday at a strategy briefing by Hirai. It will be the third significant round of staff reductions at the Japanese group since 2005.

Sony to slash 6% of workforce

Sony has faced an uphill battle in recent years. Its stock value fell 54% in 2011, hurt by a strong yen that dropped profits brought back home, as well as the twin crises of the March 2011 earthquake and the November floods in Thailand, which hit the company's supply chain. The hacking of Sony's PlayStation network last year, compromising privacy data of millions of subscribers, added to the company's woes.

Shares in Sony closed down 3.5% ahead of Tuesday’s announcement.

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Filed under: BusinessJapan


soundoff (11 Responses)
  1. (NEW) MP4/3GP ADULT VIDEOS, GET IT NW 14YR N ABOVE

    Sony has faced an uphill battle in
    recent years. Its stock value fell
    54%

    April 10, 2012 at 12:28 pm |
  2. Melissa

    Of course, the people that are laid off will not be the ones directly responsible for their financial issues. It won't be the people who are responsible for innovation. It will be the people who make the least amount of money and don't even have the ability to create new products or a decent sales program and so these layoffs will not help them one bit. They need to get creative geniuses and get rid of the slackers who put them in this position in the first place.

    April 10, 2012 at 1:02 pm |
  3. WomenOnGuard

    I have a Sony; TV, computer screen, walkman, camcorder and playstation! I think they are a great company. No doubt in my mind, that they will jump back up.

    April 10, 2012 at 4:02 pm |
  4. L0wTax

    Not surprising considering how much of the market they have been losing. Their TV sets are much more expensive than some of the other brands, so they are losing there. People don't really care about Blu Ray (regular DVD players still sold slightly more than Blu Ray this past year) so they are losing there. They took that big hit from the Playstation network getting hacked. And even before that, Microsoft has been outselling them ever since the 360 launched. Sony needs to find a way to lower operating costs so that they can lower prices.

    April 10, 2012 at 4:11 pm |
  5. Ferdin

    What did they expect?
    having a very anti consumer business mode, forcing stuff into clients, refusing to accept global standards and impose their bloated and patented hardware and awful arrogant managent.. and they expected to earn money?

    the sad part is, the workers of Sony are gonna have to pay the mistakes of the awful company management.

    April 10, 2012 at 5:24 pm |
  6. /sigh

    Hopefully they will bounce back, the company has hundreds of thousand of employees and if it goes under the impact will be great.

    April 10, 2012 at 5:28 pm |
  7. ferdinand

    Sony products are really expensive, they cant compete with other manufacturers. Internet and smart tv are totally nuts.
    You need to slash your payroll/salaries

    April 10, 2012 at 11:27 pm |
  8. Rajesh Bansal

    Apple should purchase Sony with all the money they have in bank and use its technologies to make money on APPLE TV and take over entertainment market. They can really make a great business deal by taking over patents and rights of SONY and also it could be a combination of 2 greatest companies ever in Technology. Products that can come out of it will be mind blowing.

    April 11, 2012 at 11:44 am |
  9. sameh

    learn english for free by video
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    April 16, 2012 at 12:55 am |
  10. Shoobaye

    Dear Nadesan,I wish to know your opinion about the Jeneva decsiion. I think this situation has increased the diffrences between tamil and Singalese. But most of Tamil (About 99.9%) in jaffna believe that America should send their nato force against Singala rulers and economic embargo etc ..Bharthipan

    May 17, 2012 at 5:06 am |
  11. icon pack

    No doubt.

    September 22, 2012 at 3:35 am |

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