Sony expected to report close to $3 billion in losses, restructure

Reuters is reporting that Sony expects to post its first loss in 14 years and it is a whopper. The company expects to lose some $2.9 billion (yes, billion with a “B,” folks) for the year. That’s going to call for huge cost-cutting measures including restructuring.

Sony needs to cut costs by 250 billion yen (approximately US$2.82 billion) by March 2010 and as part of the changes one plant in Japan will end TV manufacturing and design and a worldwide reduction in TV design by 30 percent. The company is also expected to cut salaries going to managers and directors. The Reuters story cites problems in an economy that sees Sony losing to the iPod in music, the Nintendo Wii in videogames and bleeding money as high-end items like flat TVs sit on shelves.

The company’s stunning reversal of fortune in the console war has been one of technology’s most intriguing stories. Wedbush Morgan financial analyst Michael Pachter told GameDaily a $299 PlayStation 3 would catch and eventually pass the Xbox 360. Pachter admits the economy may make a dramatic price cut a losing proposition for Sony. Barring a more competitive price, Pachter said Sony must convince consumers high-end features like Wi-Fi and Blu-ray are worth paying more for.

Like many companies, Sony is having problems not only with its products but its material wealth. The Japanese stock market is getting hit just as hard as the American market and that has cut the value of Sony’s financial holdings.

Read [Reuters] Via [Joystiq]