/ 17 April 2009

Sony Ericsson to slash 2 000 jobs after losses

Cellphone maker Sony Ericsson on Friday said it would cut 2 000 more jobs after it swung to a loss of €293-million in the first quarter of the year.

The group, which experienced losses in the third and fourth quarters of last year, had warned in March that its first-quarter figures would be weak because of recession in major economies that has hit demand for its handsets.

It vowed to deepen job cuts announced last year in a bid to reduce costs and return to profitability.

“The additional cost-saving programme announced today will include a further reduction in the global workforce of approximately 2 000 people,” the company said in a statement.

The global economic slowdown has reduced demand for consumer electronics and established handset makers such as Sony Ericsson and market leader Nokia must also contend with the runaway success of Apple’s iPhone, which dominates the high-end segment of the market.

Nokia reported a 90% drop in its first-quarter net profit and a more than 25% decline in sales on Thursday.

Ericsson has been trying to focus its business on fast-growing emerging markets in order to reduce dependence on its traditional, near-saturation European zone.

As a result it has sold more low-end phones where prices are lower and the competition is tougher, analysts say, but it has lacked the products to make a splash in emerging markets such as China and India.

In the fourth quarter, it made a loss of €187-million. — AFP