SON: Sony Corporation: Update on Restructuring of Sony’s Electronics Business Operations in Japan

  SON: Sony Corporation: Update on Restructuring of Sony’s Electronics
  Business Operations in Japan

UK Regulatory Announcement

TOKYO

No.12-152E
October 19, 2012

1-7-1 Konan, Minato-ku
Tokyo 108-0075

Update on Restructuring of Sony’s Electronics Business Operations in Japan

Sony Corporation (“Sony” or “the Company”) today announced additional steps it
is taking to accelerate structural reforms of its headquarters and electronics
business operations in Japan, including consolidating certain manufacturing
operations and expediting measures to reduce its headcount.

Amidst a highly competitive business environment, Sony has been undertaking a
series of measures to revitalize and grow its electronics business. As part of
its mid-term strategic initiatives announced in April 2012, Sony identified
resource optimization as one of the key initiatives for transforming its
electronics business and Sony has since been progressively implementing
various structural reform measures to optimize costs, streamline its overall
organization, accelerate decision-making processes and establish firm
foundations for sustainable future growth. In its prior corporate strategy
announcement, Sony stated that through the combination of these structural
reform measures and business portfolio realignment it expected to reduce
headcount across the entire Sony Group, primarily in the electronics business,
by approximately 10,000 in the fiscal year ending March 31, 2013 (“FY12”),
including approximately 3,000 to 4,000 in Japan.

Among the measures undertaken to date are integration and consolidation of
sales offices and resource optimization in sales and marketing organizations,
primarily in Japan, the U.S. and Europe. Within Sony’s headquarters and
support operations, certain functions have been integrated and organizational
structures have been streamlined, while the Company has conducted a thorough
review of work content and work-flow process to ensure greater operational
efficiency across these operations. Furthermore, on July 1, 2012, Sony
established Sony Corporate Services (Japan) Corp., which is working to build a
horizontal platform that incorporates support operations from across Sony’s
consolidated subsidiaries in Japan.

As the proportion of Sony’s finished products being produced at its overseas
manufacturing sites and by external ODM/OEM vendors continues to increase,
Sony has also been taking measures, such as site consolidation, to better
reflect the current scale of production, as well as steps to further enhance
operational efficiency.

The new restructuring measures announced today, relating to Sony’s
headquarters and electronics business operations in Japan are as follows.

  * Consolidation of Manufacturing Sites

In order to enhance the efficiency of Sony's manufacturing operations relating
to its digital imaging business, the manufacture of interchangeable lenses and
lens blocks currently being conducted at Sony EMCS Corp.'s Minokamo Site
(located in Minokamo, Gifu Prefecture) will be absorbed by EMCS Corp.'s Kohda
Site (located in Kohda, Aichi Prefecture). As Sony concentrates its mobile
phone business on the area of smartphones, the operations currently being
carried out at the Minokamo Site relating to mobile phones will be partially
discontinued and partially transferred to Sony EMCS Corp.’s Kisarazu Site. As
a result of this realignment, the Minokamo Site is scheduled to close at the
end of March 2013.

[Overview of Minokamo Site]
Company Name: Minokamo Site, Sony EMCS Corp.
Address: 9-15-22 Hongo, Minokamo, Gifu, Japan 505-8510
Site Area: 56,713m^2 / Total Floor Area: 49,913m^2
Number of employees: 840 (direct employment)
Principle Operations: Manufacture of interchangeable lenses for digital SLR
cameras, lens blocks and mobile phones. Customer service operations for mobile
phone business in Japan

  * Headcount reduction resulting from optimization of organizational
    structure and realignment of business portfolio

In order to optimize personnel structure and assist employees to secure new
opportunities outside the Company, early retirement programs will be
implemented at Sony Corporation, Sony EMCS Corp. and other major consolidated
electronics subsidiaries in Japan. These measures are expected to result in
headcount reduction of approximately 2,000 employees by the end of FY12, with
approximately half of the reductions (1,000 employees) expected to be in
support functions, including the headquarters of Sony.

In particular, at Sony’s headquarters operations where organizational
integration and optimization have been actively implemented, a headcount
reduction of approximately 20% is expected by the end of the current fiscal
year through the introduction of an early retirement program and resource
shifts. Headcount within the Home Entertainment and Sound Business Group,
including the TV business group which has been implementing a series of
ongoing profitability improvement measures, is expected to be reduced by
approximately 20% by the end of October 2012 due to the transfer of employees
outside the Company, together with a resource shift in personnel to other
operations within the Sony Group.

Following the sale of the chemical products businesses completed in late
September 2012, approximately 1,800 employees have been transferred outside
the Sony Group (as previously announced).

Sony is evaluating the actual impact of headcount reduction and the
restructuring charges resulting from these measures on Sony’s FY12
consolidated results; however, no material impact is anticipated on Sony’s
FY12 consolidated results forecast, as these measures are included in the
10,000 headcount reduction and 75 billion yen in restructuring charges Sony
previously announced for FY12. Furthermore, as a result of the restructuring
measures implemented during FY12, including those announced today, Sony
anticipates an annual reduction in fixed costs of approximately 30 billion yen
from the fiscal year ending March 31, 2014 onwards.

                               Media Inquiries:

                  Corporate Communications, Sony Corporation

                               +81-3-6748-2200

Contact:

Sony Corporation