Why would they axe SCE? The only thing they lose money on is ps3 hardware and R&D. At worst, they'd just stop all R&D (except on things that would decrease the costs of the ps3 and PSP) and try and curb ps3 system sales (though they're basically curbing themselves at the moment, as sales at $399 are drying up).
Their studios seem profitable enough. LBP will soon break 2 million, Resistance 2 just broke a million, MotorStorm 2 will soon break a million, Socom will probably break a million soon after it's European launch (keep in mind this was also released over the PSN), and Killzone 2 will probably break a million within a month of release. White Knight Chronicles had the highest opening of a ps3 game in Japan after MGS4, and it's looking to have the highest second week sales of any ps3 game in Japan, including MGS4.
Outside of ps3 hardware, SCE is doing very well. No need to get rid of the whole division when they could just tone down the part costing them the most money.
Hell, they could probably outright stop manufacturing ps3s for awhile, given the large quantities already in stores. They manufactured a LOT for the Holidays (hence the major losses last quarter compared to the previous quarter), but they just haven't been selling. Our stockroom is overloaded with the things.