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┬áSONY’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.