Sony, in Restructuring, to Sell Personal Computer Unit

TOKYO â€" Sony is restructuring again. Does it mean business this time?

Faced with mounting losses, the troubled Japanese consumer electronics and entertainment giant on Thursday said it had agreed to sell its unprofitable personal computer unit to Japan Industrial Partners, an investment fund.

In other steps to deal with problems that investors have urged it to address for years, the company, in its earnings report for the three months that ended in December, announced plans to revamp its television business. And it said it would cut 5,000 jobs companywide and reduce costs at its headquarters, known for lavish spending, by 30 percent.

As of the end of September, Sony had about 145,000 employees. Of the job cuts announced Thursday, 1,500 will be in Japan, the company said.

The overhaul is the fourth round of large-scale job cuts over the past decade. Sony announced 10,000 reductions in 2005, 8,000 more in 2008 and a further 10,000 two years ago.

“Sony has had bigger cuts,” said Damian Thong, an analyst at Macquarie Securities. “But these are, in some ways, the most meaningful cuts.”

Sony’s PC business, which makes notebooks and other computers under the Vaio brand name, has become a symbol of the company’s inability to keep pa! ce with American, South Korean and Chinese rivals in consumer electronics. The company that invented the Walkman has struggled in the era of the smartphone, losing its reputation for innovation to companies like Apple and its leadership in manufacturing to new powerhouses, including Samsung and Lenovo.

While Sony’s problems reflect a broader crisis in the Japanese electronics industry, other companies, like Panasonic, have moved more aggressively to restructure. That company, which has been pulling out of certain consumer electronics markets, like smartphones, and focusing more on behind-the-scenes businesses like batteries for electric cars, reported this week that its quarterly earnings had more than tripled.

While some investors and analysts have urged Sony to get out of consumer lectronics entirely, the chief executive, Kazuo Hirai, has said he wants to restructure around relatively promising areas like game consoles and smartphones.

Those businesses showed some promise in the most recent financial period. On Thursday, Sony reported a “significant increase in sales of smartphones,” as well as a big jump in operating income in its game division because of the introduction of the PlayStation 4 console.

Over all, the company reported net income of 27 billion yen, or $266 million, in the quarter, after a loss of ¥10.8 billion a year earlier. Sales rose to ¥2.41 trillion from ¥1.95 trillion, though the main factor was a weaker yen, which increases the value of overseas sales when converted into the Japanese currency.

But investors have gotten used to a dose of bad news along with any sign of improvement from Sony, and Thursday was no exception. Sony predicted that it would lose ¥110 billion in its financial year, which ends in March, after previously forecasting a profit of ¥30 billion.

Mr. Thong, the Macquarie analyst, said Mr. Hirai’s strategy of hanging on to certain consumer electronics businesses made sense because the company has always been more heavily focused on these areas than rivals like Panasonic.

“There is no exit strategy,” Mr. Thong said. “Sony is a consumer electronics company.”

But Sony is etting out of PCs. The agreement with Japan Industrial Partners will result in the formation of a new company created by the fund, Sony said. Sony said it planned to keep a 5 percent stake in the new company. Terms of the sale, including the price, remain subject to further negotiation, Sony said.

Japan Industrial Partners specializes in buying up unwanted assets from Japanese electronics giants, including companies like NEC and Olympus.

Japan Industrial Partners “believes that with its support, the new company that will operate the Vaio-branded PC business will be able to achieve future growth and profitability and meet the expectations of Vaio customers by leveraging the wealth of innovative design expertise and operational know- how accumulated by Sony within the PC busines! s,” the! companies said in a statement.

Along with televisions, PCs have been a particular drag on Sony. PC shipments worldwide fell 10 percent last year, to 316 million, according to Gartner, a research firm, as more consumers turned to tablet computers or smartphones to connect to the Internet. Sony’s share of PC shipments slipped to 1.9 percent worldwide in 2013 from 2.1 percent in 2012, Gartner said, making it the ninth-ranked PC maker worldwide.

With profit margins under pressure, only a handful of the biggest companies, including the market leader, Lenovo, make money on the business.

“Somebody has to exit from the market because there are still too many competitors,” sai Mikako Kitagawa, an analyst at Gartner. “This is an extremely difficult market in which to survive. That is not going to change.”

Sony said it would split off its television business into a separate, wholly owned subsidiary. The new unit will focus on expensive sets, including ultra-high-resolution 4K TVs, while scaling back output of less expensive televisions.

While Sony is retaining ownership, the new structure could also make it easier to open up the TV business to outside investment, analysts said.

The changes could also make it easier for the company to cut costs by outsourcing more manufacturing and other operations, while retaining the Sony brand.

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