Sony Entertainment has hired management firm Bain & Company to identify inefficiencies within the company and advise it on more than $100 million in planned cuts to its staff and overhead, according to an individual with knowledge of the studio’s plans.
News of the cuts was first reported by the New York Times, and though Sony did not acknowledge any of the specifics in that report, it did acknowledge forthcoming cuts to its entertainment division.
“As part of a nearly four year process of increasing fiscal discipline, Sony Pictures is conducting a review of its business to identify further efficiencies,” according to studio spokesperson Charles Sipkins. “Our objective is, and always has been, to operate an efficient studio that is uniquely positioned to capitalize on future growth opportunities.”
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Cuts of that magnitude will likely results in layoffs, and though Sony has already been assessing its own departments, Bain will help the studio identify which areas need to be trimmed.
The move comes after a bruising summer for the studio, which suffered several high-profile film flops such as “After Earth” and “White House Down” and box office disappointments such as “Elysium” and “Smurfs 2.” Things have picked up in the fall, as its TV studio produced the TV show turned phenomenon “Breaking Bad” and its film division offered “Cloudy with a Chance of Meatballs 2” and “Captain Phillips.”
The studio has also had to contend with a very public and noisy campaign by activist investor Daniel Loeb, who tried to pressure Sony’s parent company to spend off its entertainment assets into a separate publicly traded company.
In August, Sony’s board unanimously turned down Loeb’s proposal, but Sony Chief Executive Officer Kazuo Hirai has publicly stated that the studio needs to improve its greenlighting process and become more efficient in how it spends money.
Sony CEO Michael Lynton will offer insight into that process and offer a vision for the future at an Investor’s Day later this week.