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Sony Expects to Lose $2.9 Billion, Axes More Jobs

BOOM widget 75882Japanese electronics giant Sony has revised its earning estimates for its current fiscal year, revealing that it expects to post a loss of $2.9 billion at the end of March, and has announced another round of cost-cutting initiatives.

In October, the company forecasted it would post a $2 billion profit for the year. The drastic shift stems from lower than expected sales and the stronger value of the Japanese yen against foreign currencies. It will be the first annual loss for Sony in 14 years.

That loss is more than double of what was previously suggested by media reports.

In response, Sony will more than double its cost-cutting measures, and now plans to save $2.8 billion by reducing headcount in electronic, pictures, music and gaming, along with other restructuring changes and the closure of some manufacturing plants.

Sony had previously said it would only cut 16,000 jobs to save $1.1 billion.

Losses for Sony's gaming division, responsible for the PlayStation line of video game consoles, are expected to be $338 million higher than previously estimated. The initial loss estimate is not publicly available, so the division's total expected loss is unknown. Half of that increase stem from lower sales, the other due to the stronger yen.

The company now believes it will have sold 15 million PSPs and 8 million PS2s during its current fiscal year, which ends in March. Both estimates are 1 million units lower than earlier figures, though the projection for selling 10 million PS3s was not changed.

Despite the impending layoffs, European PlayStation brand manager Sony Computer Entertainment Europe told GamesIndustry that it does not to expect to lose staff. Sony Computer Entertainment America has yet to comment.