Sony today took drastic steps to improve its outlook, selling off its VAIO PC business and splitting off its TV unit into a separate subsidiary.
All told, the move will result in about 5,000 layoffs by the end of fiscal year 2014 - 1,500 in Japan and 3,500 overseas.
Going forward, Sony will focus on imaging, gaming, and mobile. Since taking the helm at the struggling tech firm two years ago, Kaz Hirai has been evaluating how best to return Sony to its former glory. Unfortunately, VAIO is not going to be a part of that journey, thanks in large part to the "drastic changes in the global PC industry," Sony said.
Sony will sell its PC brand, currently operated under the VAIO brand, to Japan Industrial Partners Inc. (JIP). Sony expects a definitive agreement by the end of March 2014, at which point it will cease planning, design, and development of PC products. Manufacturing and sales will also stop after the spring 2014 lineup launches globally. JIP will hire 250-300 Sony PC employees.
On the TV front, Sony will shift to a focus on more high-end devices, particularly the 4K sets like the ones it unveiled at CES, and operate the business as a wholly owned subsidiary.
"Sony plans to reinforce the company's leading position in the 4K market by strengthening its product lineup while also bolstering its 2K models with wide color range and image-enhancing technologies," the firm said. "In emerging markets, Sony will aim to harness market expansion by developing and launching models tailored to specific local needs."
The move means "cost reductions" of 20 percent in its global operations by March 31, 2016 and reductions of about 30 percent by fiscal 2015 at Sony Corporation headquarters. In terms of manufacturing sites, Sony said only that it "will proceed with the further optimization of manufacturing and other operations."
Sony aims to make the TV switch by July 2014.
Sony cameras, game systems, and mobile devices have fared much better than their PC and TV counterparts. At CES, Sony said it had sold more 4.2 million PS4 units since its November launch, and revealed the new 20.7-megapixel Xperia Z1s smartphone. The new Sony Cyber-shot DSC-RX10 camera, meanwhile, recently earned a rare 5-star review from PCMag.
For more, see PCMag's review of the Sony VAIO Tap 21, as well as Sony Vaio Team Tackles PC Slump With 'Creative Destruction'.
For more, check out PCMag Live in the video below, which discusses Sony's reorganization.