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Sony Ericsson To Axe More Jobs After Posting Q1 Loss

Mon, 20 Apr 2009

Sony Ericcson is to cut a further 2,000 jobs from its global workforce after posting poor first-quarter financial results for 2009.

The struggling mobile phone manufacturer reported a hefty year-on-year first quarter loss of £378m after tax, with profits down by 82 per cent to £128m. Unit shipments for the first quarter dropped by 35 per cent compared to the same period last year.

The telecoms firm, which seen losses worsen for the past three consecutive quarters, also revealed it has lost more market share over the period, falling by 2 percentage points to 6 per cent.

Weak consumer confidence and retail de-stocking - where retailers and distributors clear out existing stock rather than order more - were cited for the slump in sales.

Sony Ericsson President Dick Komiyama 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."

The job cuts, announced on Friday, are in addition to the 2,000 redundancies confirmed by the company at the end of last year, as it seeks to significantly reduce its annual operating expenses by 2010.

"The management intends to pursue an additional cost-saving program targeting a further annual operating expense reduction of €400m, to be completed by mid-2010," Komiyama added.
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