Sony Ericsson to Cut 2,000 Jobs After Losses

April 17, 2009
Company is selling more low-end phones where prices are lower and the competition is tougher

Mobile phone maker Sony Ericsson on said on April 17 it would cut 2,000 more jobs after it swung to a loss of 293 million euros (US$384 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 program announced today will include a further reduction in the global workforce of approximately 2,000 people," the company said.

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 April 16.

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.

Copyright Agence France-Presse, 2009

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