Stability on the horizon, says Sony Ericsson, but still cuts 2000 jobs

Echoing similar statements to those from Nokia's CEO, the struggling handset vendor Sony Ericsson claims there are the first signs of stability in the market. However, the company said it was forced to cut its workforce by another 2,000 in an attempt to save money after a dramatic slump in Q1 global handset sales resulted in a net loss of €293 million.

The company's president, Dick Komiyama, said there were signs of consumer demand for cell phones stabilising in some markets such as the US and Europe. However, he admitted that in many regions demand was still weak, especially in Eastern Europe, Russia, the Middle East and India. "We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible," said Komiyama.

The company confirmed its cost saving programme would now be accelerated to reduce its operating expense by €400 million by the middle of next year. This would involve reducing its global headcount by approximately 2,000 people (around 2,000 jobs were cut last year), some 20 per cent of its workforce. This, together with last year's reductions, means Sony Ericsson has cut one-third of its global headcount.

The company confirmed it would not make a profit in 2009 and that it would focus on making higher-priced mobiles. "Despite the fluctuations in the economic downturn, we have full support from the parent companies," said Komiyama.

For more on this story:
Financial Times and The Times

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