Sony Corp.’s mobile communication business aims to cut costs by 30 percent over the next two years to meet its goal of reversing the division’s losses.
Hiroki Totoki, the newly appointed head of the mobile division, said Tuesday that key reform measures will include streamlining its global sales operations, reducing the number of smartphone models and improving its marketing efficiency, while focusing on high-end handsets which carry higher profit margins.
“We want to complete all we will have to do within the next fiscal year,” Totoki said at a meeting with investors and analysts in Tokyo.
The 30 percent cost reduction targeted to be achieved by the end of March 2017 will improve the mobile division’s gross margin rate by 2 to 3 percentage points, he said.
Sony’s smartphone business stumbled in China as consumer demand rapidly shifted to low-priced handsets offered by local makers.
The slumping mobile business pushed Sony to lower its forecast for the current business year through March to a net loss.
The grim outlook for this fiscal year led the company to skip dividend payments for the first time since it was listed in 1958.
Totoki became president of Sony Mobile Communications Inc. earlier this month and has been tasked with rebuilding the business.
The company already plans to drastically scale back its smartphone operations in China and cut 1,000 jobs there.
Totoki said he will outline more details of the revamp by the end of March.
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