Sony Ericsson to cut 2,000 jobs

17 Apr 2009

Just a day after Nokia’s shock announcement of 90pc losses, Sony Ericsson has announced that it will cut another 2,000 jobs in 2009.

This morning’s news from Sony Ericsson marks yet another onslaught in the wave of financial losses sweeping across the mobile-phone market.

Sony Ericsson’s job losses come on top of the 2,000 redundancies it had previously announced.

With a big first-quarter loss, Sony Ericsson posted a pre-tax loss of €370m (US$485m), excluding restructuring charges.

The world’s No 4 mobile phone maker said it had shipped 14.5 million phones during the first quarter. Sony Ericsson sales slid to €1.74bn in the quarter from €2.7bn a year ago.

At this morning’s announcement, Dick Komiyama, the president of Sony Ericsson, said: “As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand.

“We are aligning our business to the new market reality, with the aim of bringing the company back to profitability as quickly as possible.”

Komiyama said management intends to pursue an additional cost-saving programme, targeting a further annual operating expense reduction of €400m, which is scheduled to be completed by mid-2010.

With the mobile-phone industry experiencing its toughest year to date, as customers cut down on unnecessary spending and retailers try to get rid of unsold phones, Sony Ericsson forecasts that the global handset market for 2009 will contract at least 10pc from around 1,190 million units in 2008. This is roughly in tune with Nokia’s forecasting for the industry in its first-quarter results, released yesterday.

Sony Ericsson had sales of around 97 million phones in 2008. It has operations in over 80 countries, including manufacturing in China and R&D sites in China, Europe, India, Japan and North America. 

At the Mobile World Congress this past February, Sony Ericsson announced its new consumer proposition – Entertainment Unlimited – which will build on its music, imaging, gaming and content services applications. The first Entertainment Unlimited phone with the concept name ‘Idou’ will be launched in the second half of 2009.

Sony Ericsson was established as a 50:50 joint venture by Sony and Ericsson in 2001, and its global corporate functions are based in London.

By Carmel Doyle