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Sony Reorganises And Cuts Pay Following Hack

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Kazuo Hirai Sony

Sony may be denying that recent management reorganization and pay cuts have nothing to do with the recent high-profile attack on its PlayStation Network – but we have an inkling it did.

First up is the reshuffle. From September, Sony’s second-in-command, Kazuo Hirai (right), who is currently president and CEO of the company’s computer video games unit, will step down from day-to-day control to take over as chairman of Sony Computer Entertainment Inc. (SCEI). Welsh-born Andrew House will take over from Hirai as president and CEO on September 1, the day after current chairman Akira Sato will retire. A spokesman for SCEI denied that the changes had any connection with April's security breach, which leaked information on 77 million PlayStation Network user accounts and forced Sony to close the network for about a month. Hirai was forced to make a public and personal apology to all those affected by the breach last month. Hirai has long been seen as a potential successor to Welshman Howard Stringer (below) as head of the company as a whole.

Howard Stringer - Sony

Speaking of Mr. Stringer, at a shareholder meeting yesterday it was revealed that he took a 16 percent pay cut last year. His salary and bonuses were cut from just over £3.1 million to £2.7 million which is still quite a considerable reward considering Stringer had overseen Sony’s third successive year recording a loss. At the annual meeting in Tokyo, Stringer thanked all the PSN subscribers for showing loyalty to the company following the breach.

He said that 90 percent of subscribers had returned, however despite this some shareholders appeared frustrated and called for Stringer to step down. The company has seen its stock price slide 30 percent this year on the back of the security breaches. Stringer however remains upbeat: "My foremost responsibility to the board and all of you is to further advance the transformation process, firmly establish Sony's position as a global product, content and service leader in the networked digital era and ensure our continued development and growth."

Sony is certainly facing some tough times ahead but it will be hoping that the management reshuffle will help steady the ship as it prepares to launch its first Android tablets and the all-important PS Vita.

Source: Reuters

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