Sony has said it will sell its personal computer (PC) unit and split its TV division into a separate subsidiary as part of its restructuring programme.
It will also cut 5,000 jobs globally in an attempt to turn around its fortunes.
The moves were announced as Sony forecast a net loss of 110bn yen ($1.08bn; £665m) for the financial year to 31 March, revising its earlier projection of a 30bn yen profit.
The TV and PC units have been a big drag on its earnings in recent years. Last month, ratings agency Moody's cited concerns over the two divisions as a key reason behind its move to cut the Japanese firm's credit rating to junk status.
Moody's said at the time that it expected earnings from Sony's core businesses to continue to face "significant" downward pressure.
The annual loss forecast came despite Sony reporting a net profit of 27bn yen for the October-to-December quarter, up from a net loss of 10.8bn yen during the same period a year ago.
Restructuring divisions
Sony's TV division has been hurt by increased competition and slowing global demand. A decline in TV prices has further hurt the profitability of the unit.
The firm has taken some steps to try to turn around the TV division, including cutting costs and shifting its focus to developing high-end TV models.
Sony said the moves had helped it to narrow losses in the division to 69.6bn yen in the financial year ending 31 March 2013, down from 147.5bn yen a year ago. It added that it expected the losses to be reduced further to 25bn yen in the current financial year.
However, it said its previous target of returning both the TV and PC businesses to profitability would not be achieved within the current financial year. Sony said that splitting the unit into a wholly-owned subsidiary would help it "further enhance" the unit's profit structure and return the business to profitability.
Meanwhile, a continued decline in global PC sales - which have fallen for six quarters in a row - have hurt its PC unit. Sony said it had decided to sell the division and concentrate on making smartphones and tablets - two sectors that are seeing robust growth.
Sony has already benefitted from the growth in these sectors, saying that "a significant increase in smartphones" had boosted its earnings in the last three months of 2013.
bbc.co.uk
The moves were announced as Sony forecast a net loss of 110bn yen ($1.08bn; £665m) for the financial year to 31 March, revising its earlier projection of a 30bn yen profit.
The TV and PC units have been a big drag on its earnings in recent years. Last month, ratings agency Moody's cited concerns over the two divisions as a key reason behind its move to cut the Japanese firm's credit rating to junk status.
Moody's said at the time that it expected earnings from Sony's core businesses to continue to face "significant" downward pressure.
The annual loss forecast came despite Sony reporting a net profit of 27bn yen for the October-to-December quarter, up from a net loss of 10.8bn yen during the same period a year ago.
Restructuring divisions
Sony's TV division has been hurt by increased competition and slowing global demand. A decline in TV prices has further hurt the profitability of the unit.
The firm has taken some steps to try to turn around the TV division, including cutting costs and shifting its focus to developing high-end TV models.
Sony said the moves had helped it to narrow losses in the division to 69.6bn yen in the financial year ending 31 March 2013, down from 147.5bn yen a year ago. It added that it expected the losses to be reduced further to 25bn yen in the current financial year.
However, it said its previous target of returning both the TV and PC businesses to profitability would not be achieved within the current financial year. Sony said that splitting the unit into a wholly-owned subsidiary would help it "further enhance" the unit's profit structure and return the business to profitability.
Meanwhile, a continued decline in global PC sales - which have fallen for six quarters in a row - have hurt its PC unit. Sony said it had decided to sell the division and concentrate on making smartphones and tablets - two sectors that are seeing robust growth.
Sony has already benefitted from the growth in these sectors, saying that "a significant increase in smartphones" had boosted its earnings in the last three months of 2013.
bbc.co.uk
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