Disclosure comes ahead of Thursday investor day
Sony Entertainment, under pressure from a key investor to boost profitability, is reviewing ways it can find “further efficiencies,” a process that the New York Times reported on Monday will result in an estimated $100 million or more in overhead cuts and potential layoffs.
The Times said that Sony Entertainment CEO Michael Lynton was likely to announce that Bain & Co. would help it identify the cuts at an investor meeting scheduled for Thursday on the studio lot.
Charles Sipkins, a spokesman for Sony, said in a statement: “As part of a nearly four-year process of increasing financial discipline, Sony Pictures is conducting a review of its business to identify further efficiencies. Our object is, and always has been, to operate an efficient studio that is uniquely positioned to capitalize on further growth opportunities.” He declined further comment.
Sony’s studio operations came under further scrutiny in May, when Third Point’s Daniel Loeb proposed the idea of spinning off those assets as a way of boosting transparency and accountability, criticizing the studio for lagging behind competitors in profitability. He struck a more conciliatory tone after the spinoff offer was rejected but told Variety that he still expected “more disclosure and a more detailed plan for how they will improve profitability in their entertainment division, including specific profitability targets.” Third Point has acquired about 7% of Sony.
A spokeswoman for Loeb and Third Point said they had no comment.