Sony to cut 1,000 jobs at mobile unit

Sony is to cut about 15 per cent of its mobile phone unit's workforce and moving its headquarters to Tokyo to reduce costs at the business.

The reduction of about 1,000 jobs will mainly be in Sweden, Sony said today in a statement. About 650 positions will be cut from its mobile division's headquarters in the town of Lund, and the rest will primarily be consultants. The unit's headquarters will move to from Lund to Tokyo, where Sony is based.

Sony is shrinking its global workforce by about 6 per cent, closing plants and reorganising its businesses after posting a 457 billion-yen net loss for the year ended March 31 amid slumping demand for its Bravia TVs, competition from South Korean rivals and a strong yen, which erodes earnings from overseas.

The Tokyo-based company on August 2nd cut its profit forecast for this year to 20 billion yen from 30 billion yen.

"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, president of Sony Mobile, said in the statement.

Sony will probably eliminate 700 jobs this fiscal year and about 300 jobs next year at the mobile phone unit, Keita Sanekata, a Tokyo-based spokesman, said by phone today, adding that the cuts are part of a 10,000 worker reduction plan.

Sony's TV and mobile-phone businesses continue to be plagued by structural challenges, such as the commoditisation and maturity of major products, rapid technological changes, and intense global competition," Moody's Investors Service said in a statement on August 6th, when it placed Sony's credit ratings under review for a possible downgrade.

Sony bought Ericsson AB's half of their 10-year-old mobile- phone joint venture Sony Ericsson Mobile Communications AB for €1.05 billion in February. Sony, which makes the Xperia handset, had a 4.2 per cent share of the global smartphone market last year, lagging behind Nokia, HTC and Research In Motion, according to researcher Gartner.

Apple topped the ranking with 18.9 per cent market share, followed by Samsung with 18.5 per cent.

Bloomberg