1000 jobs to go as smartphone division thrown into turmoil
Sony has cancelled dividend payments for the first time in the company’s history as its struggling smartphone division saw the company cut earnings predictions.
The firm has also confirmed that 1000 jobs are to go at its mobile division although it is unclear where the axe will fall. The grim news is the first time in its 58- year flotation history that it has made no dividend payment to shareholders.
It is now predicting a net loss of £1.3 billion for the year-ending March 31 2015 compared with the £286 million it predicted in July. The increased loss is down to a £1 billion writedown in a value of its smartphone business under increasing pressure from Apple and Samsung in the high-end segment and Chinese manufacturers at the lower end.
“This is the very first time we ever eliminated a dividend,” Sony president Kazuo Hirai told a press conference. “For more than 50 years we always paid a dividend. The entire management takes this very seriously. The Chinese smartphone manufacturers have made great strides and are expanding outside their own market, and this has caused a shift in the pricing.”
Sony revealed a number of new products at IFA 2014 including the latest Xperia Z3 tablet and two new smartphones, the Xperia Z3 and Z3 Compact.