Sweden bears brunt as Sony cuts 1 000 jobs at cellphone unit

Adam Ewing and Mariko Yasu Stockholm

SONY IS eliminating about 15 percent of its cellphone unit’s workforce to reduce costs at a business that trails Apple and Samsung Electronics.

Japan’s largest exporter of consumer electronics said yesterday that the reduction of about 1 000 jobs would mainly be in Sweden.

About 650 positions would be cut from its cellular division’s headquarters in the town of Lund, and the rest would primarily be consultants in the Nordic country. The unit’s headquarters would move from Lund to Tokyo, where Sony is based.

Sony is shrinking its global workforce by about 6 percent, closing plants and reorganising its businesses after posting a ¥457 billion (R48bn) net loss for the year to March amid slumping demand for its Bravia televisions, competition from South Korean rivals and a strong yen, which is eroding earnings from overseas sales.

Earlier this month the Tokyo-based company cut its profit forecast for this year to ¥20bn from ¥30bn.

“We are accelerating the integration and convergence with the wider Sony group to continue enhancing our offerings, and a more focused and efficient operational structure will help to reduce Sony Mobile’s costs, enhance time to market efficiency and bring the business back to a place of strength,” Kunimasa Suzuki, the president of Sony Mobile, said.

It would probably eliminate 700 jobs this financial year and about 300 jobs next year at the cellphone unit, spokesman Keita Sanekata said, adding that the cuts were part of a plan to reduce the workforce by 10 000 workers.

When Moody’s Investors Service placed Sony’s credit ratings under review for a possible downgrade on August 6, the rating agency said the company’s television and cellphone businesses “continue to be plagued by structural challenges, such as the commoditisation and maturity of major products, rapid technological changes, and intense global competition”.

Sony’s shares declined 0.3 percent in Tokyo trading yesterday and have plummeted 33 percent this year.

The company bought Ericsson’s half of their 10-year-old cellphone joint venture Sony Ericsson Mobile Communications for e1.05bn (R10.8bn) in February.

Sony, which makes the Xperia handset, had a 4.2 percent share of the global smartphone market last year, lagging behind Nokia, HTC Corporation and Research In Motion, according to researcher Gartner.

Apple topped the ranking with an 18.9 percent market share, followed by Samsung with 18.5 percent. – Bloomberg