Sony: A year to forget

7 years ago by in Around the world

All Japan newsese iconic tech maker Sony was preparing for an year of triumph, but it all turned into a nightmare. The turning point was the March 11 natural disasters, its chief executive officer Howard Stringer says.

This was supposed to be “the first year of the payoff, and next year was going to be the second”, Stringer said. The company estimated a $2 billion operating profit, the best result in three years, backed up by a range of new products waiting to hit the shelves, like its first tablet, a portable PlayStation game console and a compact 24-megapixel camera.

Sony’s production was severely disrupted when the company had to temporarily close 10 factories after the March earthquake and tsunami. Earnings forecast were abruptly changed to a $3.1 billion net loss, the largest in the last 16 years.

But this was only the beginning. Hackers’ attacks lead to the temporary shutdown of the PlayStation gaming networking services. A record-strong yen further slashed profits, while the global economic crisis cut into sales. A CD and DVD warehouse burned during the London riots, and floods in Thailand forced Sony to close plants.

"I honestly and truly thought I was going to have a year to remember," Stringer said in an interview for the American press. "And I did, but in the wrong way."

Sony’s upcoming problems are roughly unchanged during the last few years. Change does not come easy, as All Japan newsese laws and the culture of lifetime employment limits its ability to close factories and diminish salaries, Stringer acknowledges.


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