In a shakeup that caught Hollywood by surprise, Sony Corp. chief Kaz Hirai will hand the CEO reins of the Japanese electronics conglomerate to his top lieutenant as he transitions to a new role as chairman.
Sony Corp. announced the new management structure late Thursday in advance of its fourth quarter 2017 earnings report early Friday. Kenichiro Yoshida, Sony Corp.’s chief financial officer, will take over as president-CEO as of April 1.
According to Sony, Hirai proposed the management transition to the Sony board’s nominating committee, and the decision was approved by the Sony board at a meeting earlier today.
“As the company approaches a crucial juncture, when we will embark on a new mid-range plan, I consider this to be the ideal time to pass the baton of leadership to new management, for the future of Sony and also for myself to embark on a new chapter in my life,” Hirai said in a statement.
Sources said Hirai made the decision to change roles in part because he’s worn down from the travel schedule he’s maintained during the past six years as CEO. He aims to spend more time with his family at his home in Northern California. Sources said Hirai has indicated to insiders he intends to remain involved with Sony’s U.S.-based entertainment businesses in his new chairman role.
News of the transition in Tokyo surprised most people on the Culver City lot Thursday night. A company-wide memo was distributed after the news broke in Japan. Sources said there had been clear indications that Yoshida was a rising star, but Hirai’s resignation as CEO was not expected.
Yoshida, who first joined Sony in 1983, is described as a canny strategist and businessman, but one who is inexperienced in the creative arena and with the Hollywood studio business. He has worked closely with Hirai in leading the streamlining and financial turnaround at Sony’s core electronics operations after years of heavy losses. Sources said Hirai feels the company is on solid footing, which makes it a good time for a transition.
“My successor, Kenichiro Yoshida, has supported me closely since returning to Sony in December 2013 , contributing extensively beyond his remit as CFO and acting as valuable confidant and business partner, as we took on the challenge of transforming Sony together,” Hirai said in a statement. “Mr. Yoshida combines a deeply strategic mindset with a relentless determination to achieve defined targets, and the ability to take a global viewpoint. I believe he possesses the breadth of experience and perspective, as well as the unwavering leadership qualities required to manage Sony’s diverse array of businesses, and as such is the ideal person to drive the company forward into the future. As Chairman, I will of course offer my full support to Mr. Yoshida and the new management team, and do all I can to facilitate a smooth transition and ensure their future success.”
But the switch also comes at a time when the media marketplace is abuzz with M&A chatter. Sony Pictures Entertainment and its vast archive of movies and TV shows is seen as ripe for acquisition by a content-hungry rival or digital giant.
Sony Corp., which bought what was formerly Columbia Pictures in 1989, has for decades denied interest in shedding the studio. Hirai has been particularly forceful about batting down sale talk. But observers think Sony Corp. may simply get swept up in the moment if large-scale consolidation continues among major media firms.
The segue at Sony from Hirai to a leader with a CFO orientation has also raised some eyebrows in Culver City. Hirai worked in marketing at Sony Music and was an architect of the lucrative PlayStation franchise before he replaced Howard Stringer as Sony Corp. CEO in April 2012.
Yoshida expressed his gratitude to Hirai and the Sony board for entrusting him with the company, which is a national institution in Japan. Yoshida said he felt “a great sense of responsibility” in taking on this vitally important role.
“I will aim to build on the business foundations established by Mr. Hirai, and execute further reform measures that enhance our competitiveness as a global enterprise, and enable us to realize long-term profit growth. My first priority will be to finalize our next mid-range corporate plan starting in April, together with our immediate business plan for the fiscal year 2018, and then move ahead swiftly with implementation,” Yoshida said. “This is a hugely exciting time at Sony as we look to our future, and together with my management team I intend to determine the best path for us to move forward, and devote my full effort to creating a better Sony that captures the imagination of our many stakeholders around the world.”