The 53-year-old executive, known to all as Kaz, is quick to acknowledge the significance of his upcoming maiden sojourn. Sony Pictures Entertainment, the Hollywood studio owned by the Japanese electronics giant he heads, is basking in the glory of having earned multiple Oscar nominations for its movies "American Hustle" and "Captain Phillips," each of which has grossed more than $215 million worldwide to date.
This is a rare celebratory moment for Sony Pictures, which for nearly a year has been under harsh scrutiny for its poor financial performance, bloated overhead and some questionable movie choices. The studio's leaders are in the throes of recalibrating their struggling movie business in hopes of boosting the bottom line and adapting to shifting models in an increasingly tough economic climate. In the process of rethinking its strategy, SPE has shaken up its top executive ranks with high profile firings in its publicity, marketing, home entertainment, technology and visual effects divisions.
The unrest at Sony --- widely viewed at present as a studio in crisis -- has escalated tension between the motion picture group and executives at other divisions of the company who fear for their jobs.
To stay on top of the tumult, Hirai has taken a more active role in overseeing Sony's entertainment operations, and has become a more prominent presence at the studio's Culver City headquarters. He visits the lot roughly once every two months. He exchanges emails daily with Michael Lynton, CEO of Sony Corp. of America and chairman and CEO of Sony Pictures Entertainment, and the two typically converse for a half-hour twice a week.
"He's extremely decisive," Lynton says of Hirai. "For the most part, I'll walk him through the pros and cons â¦ and he will make a decision on the phone. It's a tough business we're in, but when a tough decision has to be made, he will make it."
When Hirai comes to Los Angeles, Lynton supplies him with a list of some 30 people to meet and speak with at Sony in an effort to keep him up to speed. The CEO says he also makes a point of perambulating around the lot on his own, both to familiarize himself with the geography and to give employees a chance to introduce themselves and have a quick chat.
His growing focus on SPE was precipitated by the harsh spotlight shone on the company last May by Daniel Loeb, one of Sony Corp.'s largest shareholders. The activist New York fund manager, also an investor in Penske Business Media, a subsidiary of Variety's parent company Penske Media Corporation, had sent a series of letters to Hirai berating Sony's management for its low profit margins and overspending habits.
Loeb slammed Lynton and his top lieutenant, co-chairman Amy Pascal, for lacking "discipline and accountability." Sony has been seen throughout the industry as one of the more lavish studios, notoriously top-heavy with executives and rich producer deals.
In a rare sit-down interview to candidly address the problems facing SPE, Hirai tells Variety he takes Loeb's condemnation very seriously. "I think it highlighted and provided an additional spotlight for those issues and brought it a public face," he acknowledges.
However, despite the criticism, Hirai vehemently rejects Loeb's proposed solution to boost shareholder value by spinning off 15%-20% of the entertainment company's U.S. assets. It has long been speculated in Hollywood that Sony would one day sell off the studio much as its Japanese electronics rival Matsushita Electric did when it unloaded MCA/Universal in 1995.
Hirai says Sony Corp., where he oversees nearly 150,000 employees worldwide, currently has no intention of selling off its Hollywood studio, which the Tokyo-based conglomerate bought in 1989 when the entertainment company was simply known as Columbia Pictures.
"We're looking at selling businesses on the electronics side that we don't deem to be core," Hirai says. "We sold off our chemicals business and all
this other stuff. â¦ I'm not entertaining even the notion of selling our entertainment assets."
A few weeks back, Sony Imageworks shuttered its branch in India (having previously closed down its New Mexico operation) and is in the process of shifting jobs from Los Angeles to Vancouver. Scores of employees are being laid off in the process.
For the foreseeable future, Hirai will focus on increasing revenue, both within the pictures division and throughout Sony's electronics arm, which is also struggling. Hirai acknowledges the need to enforce a particular kind of "financial discipline necessary to boost revenues, lower costs, increase profits and maximize margins across the businesses."