Sony announced the first strategic move to restructure the ailing company by shutting down 20 out of 31 stores and cutting 1,000 jobs in the United States.
Sony's plans to restructure the organization in the face of increased competition in the market were revealed earlier this month. The Japanese-based consumer electronics company is making the first move toward its plan to cut 5,000 jobs in Japan and overseas by March 2015. In a press release, Wednesday, Sony announced a reduction of one-third of its workforce by the end of this year. The tech giant is shutting down 20 out of 31 stores in the United States, which translates to approximately 1,000 job cuts across all sites.
The latest move follows a strategy announced earlier this month to turn the company's losses into profits. Sony's plans include selling its struggling Vaio computer business to Japan Industrial Partners, a firm that has expertise in turnarounds and acquisitions in manufacturing, and then set up its TV business as a subsidiary.
Sony released the list of stores that will continue to work and the 20 other stores that will be closed. Sony will retain most stores located in major metropolitan areas such as New York City, Los Angeles, Orlando, and Houston.
"While these moves were extremely tough, they were absolutely necessary to position us in the best possible place for future growth," Mike Fasulo, President and COO of Sony Electronics, said in a press statement. "I am entirely confident in our ability to turn the business around, in achieving our preferred future, and continue building on our flawless commitment to customer loyalty through the complete entertainment experience only Sony can offer."
Sony has lost most of its charm in the smartphone business due to extreme competition from tech giants like Apple and Samsung. But the Japanese tech giant is highly popular and the leader in the gaming arena thanks to its best-selling PlayStation consoles. The company recently announced it surpassed its pledged goal of selling 5 million PS4 consoles much before its expected targeted deadline of March 31. The company outperformed Microsoft's Xbox One in various markets.
Sony is optimistic about its restructure strategy and aims to gain a significant hold in the smartphone market.
