Japanese electronics giant, SONY has sounded a profit warning indicating that it is booking a $1.08 billion annual loss as it cuts 5,000 jobs and sell off its overpriced but stagnant PC unit. The maker projects that it will save about $5 million through the jobs cuts starting in early 2015.

The VAIO units have not  managed to register much success despite SONY being a giant in many verticals of the electronics market. SONY is selling the PC unit to Japanese Investment Partners for between $400 million and $500 million. Not much financial information on the deal was announced.

Market analysts, Moody’s recently downgraded SONY’s credit rating to junk, saying that the giant electronics maker had more work to do in repairing its battered balance sheet. SONY expects to cut 3.5% of its global work force some of whom might be hired by the new owners.

But SONY is not facing a gloomy outlook alone. Sharp and Panasonic are facing more diminished returns,as foreign rivals such as Apple and Samsung outperform them in the smartphone and television business.