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Sony undergoes changes in Business formation to reduce losses

Many Maryland residents have owned a Sony product at some point in their life, whether it be a stereo, laptop, TV or Playstation gaming system. Although Sony was once popular in the 1980s and 90s, the company is finding out that it can no longer compete in today's constantly-evolving marketplace of low-priced technology products. It is making some changes to its Business formation in order to stay relevant in the industry and make up for an estimated loss of $1 billion.

The planned business restructuring will include some major changes. With so much competition from other computer and TV manufacturers, Sony is considering selling its Vaio PC unit to Japan Industrial Partners, a private equity organization. It is also formulating a plan to spin out its TV business by July in order to turn a profit later this year.

Sony estimates it will lose more than $1 billion this fiscal year. These proposed changes will cost another close to another billion dollars. In addition, the company's stock price has already dropped 11 percent so far this year. On top of that, the restructuring will end up cutting 5,000 jobs. This is a dramatic change from third quarter 2013, when Sony netted $257 million, mostly from the new Playstation 4.

Although these seem like major changes, many investors are looking for more. They expected more changes to the TV business, as well as improvements to the music and film division. With so much competition nowadays, companies have to do what they can to hold on and do away with mounting debt without filing for bankruptcy. That often means major business reorganization and changes to business operations.

Source: CNN, "Sony sells PC business, cuts 5,000 jobs" Charles Riley, Feb. 04, 2014

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