Stringer’s Role at Sony Expanded

(Feb. 27, 2009) TOKYO: Sony is reorganizing under expanded management by Sir Howard Stringer, chairman and CEO of the company. Stringer will run now the gaming division, taking over as president in place of Ryoji Chubachi, who will be bumped to vice chairman. The change becomes effective April 1.

Stringer’s intention is to integrate the division that makes PlayStations with the rest of the company’s consumer electronics products--TVs, digital still cameras, PCs. The idea is to make stuff that works together, particularly now that people want to be able to pass content between TVs, cell phones, game consoles, PCs and very possibly digital picture frames.

The Street said, “Yes, you can,” to the Stringer ascent, boosting ADRs of Sony ( NYSE:SNE) from last night’s close of around $16.25 to around $16.75 today. The executive shuffle comes as Sony prepares to report its first operating loss in 14 years. The Japanese conglomerate issued a warning a few weeks ago that it expected to post an operating loss of as much as $2.9 billion for 2008.

Two new business units are being formed under the reorg. Networked Products & Services will comprise PCs (the Vaio), mobile products (think Walkman), and software and services. New product incubation within the group will focus on connections with the PlayStation Network, “which currently has 20 million registered accounts globally,” Sony said. The group will be led by Sony executives Kazuo Hirai and Kunimasa Suzuki, who will direct PC and incubation operations.

A Consumer Products Group will encompass TV, digital cameras, home audio and video under the leadership of Hiroshi Yoshioka, who will also oversee semiconductors. Yoshihisa Ishida will head up the TV Business group.

Two new “cross-company” units will focus on device interaction capabilities, and on manufacturing and logistics.

Giving Stringer more power is seen as a cultural move as well as a strategic one, according to an analyst quoted by Bloomberg.

“The Japanese can’t take decisive actions toward their comrades during hardship,” Yuuki Sakurai told Bloomberg. Sakurai is general manager of financial and investment planning at Tokyo’s Fukoku Mutual Life. “As a non-Japanese without such loyalties, Stringer is better positioned to conduct the large-scale restructuring that Sony has to do.”

The estimated cost savings of the reorg is expected to be around $3 billion in the first year.