Bloomberg News

Sony Said Cutting Entertainment Jobs on Hirai Profit Pledge (2)

March 18, 2014

Sony Corp. (6758) began a new round of job cuts at its entertainment division, a person with knowledge of the situation said, part of Chief Executive Officer Kazuo Hirai’s effort to improve profitability at the unit.

Sony Pictures Entertainment is eliminating about 216 positions at its Culver City, California, headquarters, according to a letter to state regulators obtained by Bloomberg News. Cuts are also taking place at other locations worldwide, the person said, asking not to be named because the details aren’t yet public. Sony began notifying employees yesterday and will continue over the next few days, said the person.

Sony Pictures Entertainment, led by Michael Lynton, is following through with plans to reduce expenses at the division by $250 million. Hirai announced the target at an investor meeting in November as the Tokyo-based company sought to deflect a push by investor Daniel Loeb to create a separately traded Sony film and television operation.

“We are continuously evolving the business to make Sony Pictures Entertainment more efficient and competitive,” Charles Sipkins, a spokesman for the unit, said in an e-mailed statement yesterday.

Mami Imada, a Tokyo-based spokeswoman for Sony, declined today to comment on the number of job cuts.

Sony fell 0.5 percent to close at 1,720 yen in Tokyo trading, extending a 5.8 percent decline this year. The Topix index added 1 percent today.

Electronics Cuts

The company closed a division with more than 70 employees that was responsible for Sony’s website, Variety reported. Those responsibilities are being redistributed to others, according to the person.

Previously this year, Sony filed notices with California to reduce 490 jobs in the state. Sony Computer Entertainment cut 40 positions in Santa Monica on Feb. 25, while Sony Electronics filed plans to eliminate 450 employees in San Diego and San Jose on May 2.

Sony Pictures Entertainment had about 6,500 employees worldwide before the cuts. In January, the unit let go Chris Cookson, president of Sony Pictures Technologies, and Mitch Singer, the studio’s chief digital strategy officer who led the industry’s development of the UltraViolet film storage system.

At the investor meeting, the company also said it plans to reduce the number of films released by Columbia Pictures, shifting investment to television production.

Loeb’s Third Point LLC pushed for an initial public offering of the entertainment assets last year after buying a stake in Sony. Hirai rejected the move in August, saying 100 percent ownership is crucial to the company’s success.

Loeb has said Sony is doing the things he wanted, including ensuring greater transparency and accountability. Third Point has “high hopes” for Hirai and his team to make difficult decisions needed to boost earnings and reach goals, the fund said in its fourth-quarter letter to investors on Jan. 21.

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Stephen West, Ben Livesey


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