Tensions are rising within Sony over a restructuring aimed at cutting billions of yen from costs, with Sir Howard Stringer, its British-born chairman and chief executive, pitted against what one senior figure called an “old guard” of managers in its electronics division.
News of the clash comes as the Japanese consumer electronics group prepares to announce on Wednesday or Thursday, the details of a restructuring that was announced in December, including where job cuts will fall.
Managers in the company have told the Financial Times that Sir Howard’s plans to cut 16,000 full-time and part-time jobs and restructure the company have met resistance from executives in its traditional manufacturing business.
The dispute centres on whether products such as televisions have become commodities, in which case, Sir Howard believes, Sony should cut its production costs and rely more on sales of software built into its gadgets. He emphasised the importance of this business in a speech at the US Consumer Electronics Show this month.
There is acute sensitivity, too, about sacking Japanese staff, who believe that they have a “job for life”. However, a decision to spare them from the planned cuts would risk angering Sony’s foreign employees. A manager at Sony in the US said his colleagues saw “a lot of fat” in the Japanese operations.
Sony has already announced factory closures in the US and France, saying there will be five or six in total, as it seeks to save Y100bn ($1.1bn) in annual operating costs. However, it is expected to make further cuts after it has set out details of those plans.
Kota Ezawa, an analyst at Nikko Citi in Tokyo, said: “Sony’s electronics business is bleeding very badly,”.
The downturn would place such severe pressure on Sony’s cashflow that the company would be forced to restructure further, he added.
The long delay since the restructuring was outlined on December 9 has added to anxiety among workers. One Sony employee said that the mood within the company was “black”, while on internet message boards factory workers have described management as “nothing but cost-cutters”.
“We used to get the message: ‘Make a high quality product’. Now we don’t know what we should be doing, except maybe not spending any money,” said one engineer who has left the company.
