Sony Corp. Chief Executive Kazuo Hirai, 57, will step down in April after a six-year push to revitalize the Tokyo-based electronics and entertainment giant.
Hirai, who was named CEO in 2012 to succeed Howard Stringer, will be replaced by Kenichiro Yoshida, currently the company’s chief financial officer, Sony said Thursday. Hirai will become Sony’s chairman, where he will focus on the company’s entertainment units, according to a memo sent to staff.
Hirai’s career at Sony spans more than three decades. He first joined Sony in 1984 as a marketing executive at a joint music venture owned by CBS and Sony in Japan. He spent much of his career in the company’s video game division before taking the top job.
He oversaw an at-times tumultuous period for Sony that was marked by a crippling cyberattack against its Culver City-based movie and television studio in late 2014 that was blamed on the North Korean government.
During Hirai’s tenure, Sony had to dramatically refocus its electronics business after struggling to compete with dominant players including Apple Inc. and Samsung. Sony spun off its TV set division and sold off its Vaio laptop computer business in 2014. It also significantly scaled back its mobile phone business.
A key part of Hirai’s job in recent years was to mount a turnaround for Sony Pictures Entertainment after the studio’s motion picture business fell far behind its Hollywood rivals. After Sony Entertainment CEO Michael Lynton said he was stepping down last year, Hirai spent months flying back and forth from Japan to California to oversee the transition. Tony Vinciquerra replaced Lynton last May.
Hirai said on a conference call with analysts that it was his decision to step down. He is going out on a high note for the company, whose stock has risen 63% in the last 12 months in Japan. Sony on Thursday raised its full fiscal year operating profit forecast to $6.42 billion, more than double its 2016 income. Sony is expecting full-year revenue of $75 billion, representing a 12% rise from the prior fiscal year.
“I have dedicated myself to transforming the company and enhancing its profitability. I have been considering for some time when would be the appropriate time for me to step away from my role,” Hirai said. “I decided this would be the ideal timing to pass the baton of leadership to a new management team for the future of Sony and also for myself to embark on a new chapter in my life.”
Yoshida, 58, is credited with helping Hirai return the company to financial health after years of losses from its consumer electronics business. As CFO, he has been intimately involved in Sony’s businesses.
Yoshida has served more than 30 years at Sony, spending much of his career in business divisions including investor relations and finance. He spent 14 years at Sony’s internet service provider So-net before rejoining the main company in 2013. Yoshida was named CFO in 2014.
On the conference call, Yoshida touted Sony’s results, saying that the company is forecasting its highest annual profits in two decades. He said Sony must continue to adapt to remain competitive.
“Although we are now able to forecast a return to record profit levels, our position in the global market is still very different to where we were 20 years ago,” Yoshida said. “Mr. Hirai and I both share a great sense of urgency regarding the need for us to enhance our competitiveness as a global company.”
Sony ventured into Hollywood in 1989 when it bought Columbia Pictures. There has been much speculation about whether the company will eventually sell its entertainment division, though it has repeatedly denied any plans to do so. That buzz is only expected to get louder as other media companies combine to better compete with tech giants including Apple and Amazon, which are investing billions in their own entertainment operations.
Walt Disney Co. last year proposed a $52.4-billion purchase of assets from Rupert Murdoch’s 21st Century Fox, pending government approval. CBS Corp. and Viacom Inc. on Thursday announced they’d formed special committees to evaluate a potential merger.
Sony Pictures’ movie business has lagged behind larger rivals in recent years. The studio has been trying to stage a recovery under motion picture group Chairman Tom Rothman, and recently had a major hit with “Jumanji: Welcome to the Jungle,” which has grossed $825 million globally. Sony’s TV studio, known for shows such as “The Blacklist,” “Better Call Saul” and “The Crown,” has been a reliable moneymaker.
Sony Pictures Entertainment is expected to generate $9 billion in revenue for fiscal 2017, up 13% from the prior year. The studio is projected to swing to an operating profit of $345 million, compared with a massive loss a year ago driven by a $962-million impairment charge against the business.