Sony has predicted a loss of annual earnings due to lower sales. This is the first time in 14 years that the company is facing such a situation. It is believed that slumping sales, a strong yen and restructuring costs due to the global slowdown are to be blamed for the situation that the company is facing. Last time the company reported a loss was in the year 1995.

For the financial year ending in March, Sony said it expected to make a net loss of 150bn yen ($1.7bn, £1.2bn). About 80 percent of the company sales come from overseas and the global economic crisis has hit it badly. Chief Executive of the company, Howard Stringer would soon reveal the company's plans at its Tokyo headquarters.

Sony had been experiencing problems for some time. In October, predicted a decreased profit. Then last month, it announced widespread cost cuts, including trimming 4 percent of its worldwide work force, reining in spending and shutting plants.

Sony had also said that it would cut 8,000 of its workforce and close five or six plants. Sony also plans to reduce its electronics investments by about one-third by the end of March 2010. The restructuring plans are expected to recover more than 100 billion yen
($1.1 billion) in savings a year by March 2010.