Beleaguered Sony exits PC business; axes 5,000 jobs

“Sony Corp Chief Executive Offer Kazuo Hirai is seeking to cure a TV business that has lost $7.8 billion over a decade by isolating it to speed up decisions on future strategy,” Sophie Knight and Reiji Murai report for Reuters. “Hirai is spinning off TV operations into a separate business in the latest attempt to fix a division that he says for now remains central to the Japanese electronics maker. It’s part of a broader restructuring: Sony also confirmed on Thursday it will sell its Vaio personal computer division, effectively ending 17 years in that business.”

“Sony said charges associated with the moves will combine with weaker showings than it expected in mobile phones, TVs and PCs to pitch it into a net loss this fiscal year of 110 billion yen ($1.1 billion). The maker of Bravia TVs and Playstation game consoles will cut 5,000 jobs – just over 3 percent of its global staff – as a result of the shakeup, counting on saving 100 billion yen in annual fixed costs,” Knight and Murai report. “Two years into the job, Hirai’s gambit comes as Japan’s electronics firms struggle to compete with deep-pocketed industry giants like Apple Inc… the Vaio sale marks the first time Hirai has pulled a major consumer product line.”

“The domestic Vaio PC division will be sold to investment fund Japan Industrial Partners, which will set up a separate company to take over the operations. Financial terms of the sale weren’t disclosed, but Sony will initially hold a 5 percent stake in that company,” Knight and Murai report. “The TV operations will be spun off into a separate unit by July 2014, Sony said. The job cuts – mostly outside Japan – are to be implemented by March 2015.”

Read more in the full article here.

MacDailyNews Take: Steve Jobs’ Post-PC era is right on schedule.

Sony finally figures out that it’s tough to make money when you’re stuck with an inferior OS and the market you’re targeting, premium PCs, is dominated by Apple’s Macintosh 9-1.

Related articles:
Steve Jobs offered to let Sony VAIO PCs run Mac OS X, but Sony blew it – February 5, 2014
Apple Mac owns 90% market share for ‘premium’ PCs costing over $1,000 – February 1, 2010

29 Comments

  1. I can’t tell you how many stories I’ve heard in the last couple of years of people dumping their laptops for iPads. Simply put, most consumers don’t need a PC at home anymore. Unless you’re a student, most rarely ever use them at home. Of the few I know that do still have PC laptops, most of them are ones that are supplied by their employer. They haven’t bought one themselves in several years.

    1. Every college kid I know either has or wants a Mac laptop for school. It’s the cool laptop to have according to the kids I ask about their choice. Same thing with the iPhone and iPad. My stepdaughter didn’t want my Kindle after I updated to an iPad Air.

    2. Totally agree.

      We are an iPad and iPhone family.

      I use a top end iMac as I work from home. My 9yr old apple MacBook Pro finally died this week and I won’t be replacing it, so it was the last laptop I will ever buy.

      The iMac is a lifeline for me as it has a massive screen for my creative work but I use drawing software on my iPad air to do rough sketches and explore ideas.

      Windows has never been an option since I left art college nearly 25yrs ago.

  2. SONY exits PC BUSINESS! I’d forgotten they were in it. I understand Dell and HP are still around also. Well, won’t be long. What with clueless Gates back at Microsoft, Windows dying a slow and agonizing death, the LINUX desktop still being a unicorn, iPads eating the industry, and those people who do want conventional computers buying Macs, I give DELL 1 year max, and HP will likely sell off the PC business this year and try to make tablets.

    Steve, you bitchslapped the entire industry on the way out. Way to exit in class.

    1. Dell is following IBM into services and away from hardware, HP is mostly an ink company and Microsoft will (i think) abandon it’s partners for the most part and take the Apple route of integrated HW/SW.

      The existing PC business model is a commodity business. I cannot imagine someone stupid enough to buy Sony’s VAIO business. For all the effort it is still a Windows PC.

      1. I will not be truly happy until Dell is dead and gone.
        Not only do they make junky computers, but Dell services suck really bad.
        They should quit while they are somewhat ahead.

        1. There are too many managers that buy Dell, a big name brand, so they can be patted on the back for saving a few dollars while their employees suffer and get blamed for a lack of productivity.

          A lot of people wouldn’t mind if Dell died.

  3. Completely unsurprising. Sony declared their intention months back to concentrate on their Xperia tablets and phones. With the way the market is going towards tablets there’s no point keeping their zero-profit low-volume laptop business going.

    And I’m going to say it. I hope they bloody well succeed with Xperias. They are nice bits of kit. Not for me of course, because I prefer an iPad. But if Apple are going to have a competitor I’d rather it were a company like Sony who have a bit of taste rather than Samsung who can only shamelessly copy.

  4. I have full respects for Sony, they invented the Walkman but dropped the ball as apple created the iPod.

    Hats off to the Sony guys – full respect to you all and I look forward to seeing what you do in future and may a fair battle between you and apple happen.

    /bow

    1. I agree, screw them with a proprietary memory stick. They have spent decades trying control the electronics world with one stupid scheme after another. Also, they were making the first MacBooks before they turned around and stabbed apple in the back with the Vaio in the first place.

  5. The PC repair shop owners I have spoken to, have switched to repairing smartphones. No too many people one takes old PC’s for repairs anymore, and the have a glut of old PC’s no wants.

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