Sony Ericsson Drops 2,000 Jobs

Sony Ericsson is to cut 2,000 jobs over the next 12 months from its 11,900 workforce as part of a cost reduction programme following poor results for the second quarter. The joint venture revealed late last week a 97 percent fall is earning for its Q2 to just Euros 6 million ($9.5 million), blaming tough market conditions, high development costs and increasing competition.

Quarterly sales were down more than nine per cent to $4.45bn. The company warned investors last month that results would be poorer than expected. Sony Ericsson has vowed to focus more attention on emerging markets, and predicts that this will help lead to a rise in unit sales of 10 per cent this year. The company hopes to realize more than $470 million in cost cuts each year following the layoffs and other cost-cutting projects.

Just over a year ago, Sony Ericsson held the fourth spot in global handset sales, threatening Motorola for the No. 3 spot. However, since then the company has fallen to fifth while LG Electronics has taken over the fourth spot. Also last week, Nokia announced healthy figures for its handsets business with second-quarter phone sales up 21 percent from the previous year, representing a 6 percent increase over first-quarter sales.

However, market research group Gartner slashed its forecast for the cell phone market to between 10 percent and 11 percent growth from a May estimate of 10 percent and 15 percent.

Article courtesy EETimes.