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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • Sony’s Reorganization Plan Seen as Drastic
  • March 12, 1999 (TOKYO) — Sony Corp. announced a drastic organizational reform plan on March 9 that includes changing its overall company structure.
    Major points of the reform plan include; (1) review of business units in the electronics field; (2) establishment of Digital Network Solution, an organization in the network business field under the direct supervision of the headquarters; (3) reorganization of manufacturing offices and measures to increase profitability such as establishment of a supply chain management system; and (4) making its three group companies 100 percent-owned subsidiaries.

    These reform plans will be implemented from April 1.

    As for its organizational system in the electronics field, the existing company will be reorganized into three business units. The new system will consist of four business units, the new three units and Sony Computer Entertainment Inc., a game machine development company.

    The four units are: Home Network Co., Personal IT Network Co., Sony Computer Entertainment and Core Technology & Network Co. They will be the core organizations in the electronics business field.

    Digital Network Solution, a new organization in the network business field, will develop strategies, technologies and business models to create network-related businesses. It plans to provide digital contents of movies and music as well as insurance and financial services.

    To increase profitability, offices that exist in 70 places at present will be integrated into approximately 55 offices by the end of fiscal 2002. Sony also said that about 170,000 employees in the whole Sony group will be reduced by approximately 10 percent by 2002.

    Among Sony group companies, Sony Music Entertainment (Japan) Inc., Sony Chemicals Corp. and Sony Precision Technology Inc. will be made 100 percent-owned subsidiaries. Sony owns approximately 70 percent of the stock of each of the companies, and the rest is owned by financial institutions. The three companies will be made fully-owned companies of Sony around Jan. 1, 2000. Sony’s intent for making them 100 percent subsidiaries is to form a foundation for quick implementation of the group’s strategy.

    (BizTech News Dept.)

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