Sony is to cut its global workforce by 5,000 people by the end of March 2015 and sell its Vaio personal computer (PC) unit as the Japanese electronics giant struggles with financial losses.
The layoffs will affect 1,500 staff in Japan and a further 3,500 overseas.
Redundancies, early retirement and potential transfers will be offered as the company of 145,800 employees looks to trim its costs before the start of its 2015 financial year, AP reported.
The moves come as Sony said it expects losses of $1.1bn for the year to the end of March, a reversal of its October forecast of a profit.
Announcing the sale of Vaio to a Japanese investment fund, Sony cited “drastic changes” in the computer market as it laid out plans to restructure its PC, television and other businesses.
Japan Industrial Partners, which specialises in turnarounds and buyouts in manufacturing, said it aimed to reach an agreement by the end of March to buy the PC business.
A small player in the global PC business, Sony has often been criticised for having too much under its wing.
If the PC deal comes together, a new company will be established, both sides said.
Sony said it would concentrate on its line-up of smartphones and tablets and “cease planning, design and development of PC products”.
Sony has been battered by stiff competition from Samsung and Apple, acknowledging it will not be able to stop losing money in its Vaio or Bravia TV operations as it had repeatedly promised.
Sony Chief Executive Kazuo Hirai told reporters the company’s electronics business was gradually improving, but restructuring costs would send the company into losses for the fiscal year.
He said the moves were aimed at “accelerating the revitalisation and growth of our electronics business”.
“But the environment surrounding electronics will get more severe and it will be hard for us to achieve the goal we set for our PC and TV businesses,” he told reporters in Tokyo.
The news comes a week after Moody’s downgraded its credit rating on Sony to junk, saying the maker of the PlayStation game consoles had more work to do in repairing its battered balance sheet.
Japan’s embattled electronics sector, including Sharp and Panasonic, has faced serious challenges from foreign rivals as they were outplayed in the lucrative smartphone market and low-margin television business.
“It seems like Sony is still searching for direction, things are going to be tough for a while,” Mitsushige Akino, analyst at Ichiyoshi Investment Management, told the AFP news agency before the announcement.
“Japanese electronics firms have to carry out these restructurings quickly, including launching more competitive products, while the weak yen gives them breathing room.”
The inventor of the iconic ‘Walkman’ has struggled in recent years and has pinpointed digital imaging, video games and mobile as the units which it hopes will lead a turnaround in its core electronics business.
Sony has seen buoyant sales of its Xperia offering and record sales for its new PlayStation 4 console.