Sony has appointed Kenichiro Yoshida, the chief financial officer credited for executing the turnround at the once-struggling Japanese electronics and entertainment group, as its new chief executive.
The promotion of 58-year-old Yoshida, which will take place in April, boosted Sony’s share price by 1.9 percent on Friday as investors cheered the selection of a chief executive who has proved willing to jettison Sony’s previously renowned consumer products to plug losses.
Kazuo Hirai, Sony’s current CEO, will be handing over the role he has held for six years to become the group’s chairman after spending much of his tenure scaling down Sony. That has resulted in the sale of its Vaio PC and battery businesses and decisions to split out as separate businesses its TV and Walkman divisions. Under Hirari’s watch, Sony also became a target of a massive cyberattack on its U.S. movie studio in 2014, leading to a revamp of its management team.
People who have worked with Yoshida describe him as blunt and “ruthless” when employees fail to meet targets.
Thanks to these restructuring efforts, Sony’s fortunes have improved since Hirai took the helm in 2012, replacing Sir Howard Stringer. On Friday, the group confirmed it was heading for its most profitable year on record and raised its operating profit target for the second time in three months.
It now projects annual profits of 720 billion yen ($ 6.6 billion) instead of the 630 billion yen it forecast in late October, bolstered by stronger-than-expected music and image sensor businesses.
“I have dedicated myself to transforming the company and enhancing its profitability,” Hirai said in a statement. “And it excites me to hear more and more people enthuse that Sony is back again.”
At a news conference in Tokyo, Hirai warned that Sony employees should stay vigilant even as earnings have rebounded to a level that has turned its television, mobile phone and camera businesses profitable.
Hirai turned to Yoshida to execute his turnround plan, elevating him to the role of CFO and his second-in-command in 2014. To an outsider, it was an odd choice since Yoshida was a Sony dropout who left in the early 2000s to join a subsidiary.
If Hirai, known to his colleagues as “Kaz,” is the rare Japanese chief executive who appears more comfortable delivering stirring speeches in English, Yoshida is soft-spoken and down to earth, preferring to stick to financial figures in making his argument.
People who have worked with Yoshida describe him as blunt and “ruthless” when employees fail to meet targets, but investors have welcomed the greater transparency he has brought to the company. Since Yoshida joined, cost cuts have been extended from the manufacturing side to sales divisions and headquarters, and to subsidiaries based in the U.S., including the movie studio.
“Our position in the global market has changed drastically compared to two decades ago. Hirai and I share the same sense of crisis on how Sony can strengthen its competitiveness as a global company,” Yoshida said.
With a recovery in profits, analysts also say a bigger challenge awaits Sony as it seeks to find its position in the new era of the internet of things and artificial intelligence after more than a decade of lagging behind rivals such as Apple and Samsung.
“Investors have strong faith in Yoshida,” said Kazunori Ito, an analyst at research group Ibbotson Association Japan, a Morningstar affiliate. “Sony’s recovery could easily crumble, so it’s necessary to have someone like Yoshida who can impose discipline inside the company. Sony can’t go back to its go-go days.”
Fast Facts: New Sony CEO is close ally of his predecessor
- A company veteran, Yoshida joined Sony in 1987 but has spent most of his career outside its core electronics business.
- He has worked extensively across the company’s business lines, both in Japan and the U.S., as well as serving for a time as aide to former Sony CEO Nobuyuki Idei.
- Between 2000 and 2013, Yoshida left Sony to work for So-net, a Japanese internet provider and Sony subsidiary. As executive president, he took So-net public in 2005.
- Current chief Kazuo Hirai tapped Yoshida in December 2013 to help turn around the losses in Sony’s consumer electronics, naming him deputy chief financial officer and promoting him to CFO the following year.
- Hirai described his successor as a “valuable confidant and business partner” and lauded his “deeply strategic mindset with a relentless determination to achieve defined targets, and the ability to take a global viewpoint.”
- Yoshida has successfully helped Sony scale back and restructure key areas of its business, including its mobile phone division.
By Kana Inagaki
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