Sony to Cut Film Cost by $300 Million in 2016

TOKYO — Sony Corp. president-CEO Kazuo Hirai announced at a strategy briefing Thursday that the troubled electronics giant intends to triple its operating profit to 400 billion yen ($3.95 billion) by the 2015 fiscal year ending in March 2016, while also unveiling a $300 million cut in the company’s beleaguered film division.

In November, the Michael Lynton-led Sony Pictures Entertainment said it was targeting $250 million reduction on the film side .

“We are continuously evolving the business to make Sony Pictures Entertainment more efficient and competitive,” a Sony spokesman said on Wednesday.

Hirai’s ambitious goal for 2015 compares with the $1.38 billion operating profit the company expects to earn this fiscal year. Meanwhile, Sony is forecasting a net loss of $493 million for the same period.

Hirai (pictured) underscored that Sony’s entertainment operations are core to its long-term growth plan, while conceding that film costs would be reduced $300 million by the fiscal year ending in March 2016. The number had previously been reported at $200 million as Sony continues to

He also pointed out that that costs reductions from further restructuring of the electronics biz will be crucial in moving the company into the black.

“Our electronics, financial and entertainment businesses are all core,” Hirai said.

SEE ALSO: Sony CEO: I’m Not Selling Off Entertainment Assets

Other key growth areas for Sony, mentioned by Hirai in earlier strategy briefings, are games, mobile devices and imaging technology.

On July 1, Sony’s long-ailing TV manufacturing operations will reboot as a separate company, Sony Visual Products, taking a burden off the balance sheets. Last quarter the TV segment generated $253 million in operating losses. Hirai expressed confidence, however, that “the television business can move into the black in the present term.”

In February Sony announced that it would exit its VAIO PC business entirely. But the conglom has so far resisted calls from investor Daniel Loeb and others to break up its disparate parts and sell off its studio and music divisions to better concentrate on its core electronics segment. (Loeb is also an investor in Variety Media).

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