By Marc Gunther

(FORTUNE Magazine) – It's been a long seven months for Sir Howard Stringer. Since being named Sony's first non-Japanese CEO back in March, Stringer, 63, has thrown himself into the daunting task of reviving the struggling $65-billion-a-year global electronics and entertainment giant. In late September he went public with the company's latest restructuring plan--one that will eliminate 10,000 jobs, or nearly 7% of the workforce. The voluble Welsh-born executive talked with FORTUNE's Marc Gunther about what it will take to turn Sony around.

You've said the world in which Sony operates has undergone seismic change. How so?

The digital world is good news and bad news. It has created lots of opportunities for networking and new consumer experiences. Do you want to watch something on a television or a computer or a cellphone? But it has also opened us up to competitors, whether it's Microsoft or Dell or Nokia, or the Chinese buying up brand names--the Polaroid brand, the Westinghouse brand--and then cobbling together components to make something that looks and feels exactly like our own product. That generates commoditization. We're all chasing each other's prices down the road to ruin.

Is that why you need to cut costs?

This plan isn't really about cost cutting per se. The idea is to streamline the very large structure in Tokyo to make decision-making simpler and faster. We've gotten so big, with so many different silos making so many different products, that control over product strategy, product development, product design, and software integration got more and more complicated.

I look at this as an opportunity to liberate our great, young engineering talent to flower in an environment with more communication and more transparency. We need to become more dynamic and more focused. So it's cost cutting with a purpose.

Given that Apple's iPod dominates the portable music market and Samsung has been rising in televisions, how do you generate top-line growth for Sony?

We're in a great position with high-definition TV. Professional cameras, digital projectors, and the high- definition camcorder, which is selling extremely well. Our SXRD high-end, high-definition, rear-projection televisions provide probably the best picture in the world. Following that up, we'll have PlayStation 3.

You're often described as an outsider. Will that help you shake up Sony?

Actually, I'm an insider. I've been here eight years. It's not like this is a village where you have to have been here for 100 years. So I don't feel at all like an outsider in my relationships with my Japanese colleagues. But the perception is that I'm an outsider, and so people think I will be more brutal than the Japanese would be themselves, in a culture that has jobs for life. Certainly American investors would like me to be more of a cost cutter.

I'm trying to change Sony from the inside. The relationships I have with senior executives are very important. They know a lot more than I do about electronics. My job is to push and push and stimulate debate, but in the end we will walk a shared path. I can get where I want to get much more successfully from inside the company--not sitting off at a distance, tossing grenades.

How much Japanese have you learned?

Oh, don't do this to me. Not very much. You get points in the early going for trying but after a while they say, "Oh, he's not speaking it very well." In English you can put the words in any order, and most of the time it's charming. Speaking languages like French and Japanese badly is simply not charming.