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Sony Ericsson posts quarterly loss, promises more job cuts
Source: Agencies |
April 18, 2009, Saturday
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Print Edition
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MOBILE phone maker Sony Ericsson yesterday posted a 293-million-euro (US$387 million) net loss in the first quarter on falling sales and said it would slash an additional 2,000 jobs to cut costs.
It was the third consecutive quarterly loss for the Sony Corp and LM Ericsson AB joint venture, which reported a profit of 133 million euros in the same period in 2008.
Sales in the January-March quarter tumbled by 36 percent to 1.7 billion euros, from 2.7 billion euros a year ago.
Sony Ericsson attributed the sales drop to weaker demand as distributors and retailers trim their inventories amid the economic slowdown.
The company shipped 14.5 million mobile devices in the quarter, down 35 percent from a year ago.
"As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand," company President Dick Komiyama said. "We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible."
Cost reduction plan
Komiyama said Sony Ericsson plans a new round of restructuring aimed at reducing operating costs by 400 million euros by the middle of next year.
About 2,000 jobs would be cut as part of the savings plan.
Sony Ericsson had earlier laid off 2,000 workers as part of a previous savings program.
Some analysts have criticized Sony Ericsson for focusing too much on the more expensive mid-range and high-end phones, thereby missing opportunities in emerging markets. The average selling price of Sony Ericsson phones was 120 euros in the first quarter - compared with 65 euros for devices from market-leader Nokia.
It was the third consecutive quarterly loss for the Sony Corp and LM Ericsson AB joint venture, which reported a profit of 133 million euros in the same period in 2008.
Sales in the January-March quarter tumbled by 36 percent to 1.7 billion euros, from 2.7 billion euros a year ago.
Sony Ericsson attributed the sales drop to weaker demand as distributors and retailers trim their inventories amid the economic slowdown.
The company shipped 14.5 million mobile devices in the quarter, down 35 percent from a year ago.
"As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand," company President Dick Komiyama said. "We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible."
Cost reduction plan
Komiyama said Sony Ericsson plans a new round of restructuring aimed at reducing operating costs by 400 million euros by the middle of next year.
About 2,000 jobs would be cut as part of the savings plan.
Sony Ericsson had earlier laid off 2,000 workers as part of a previous savings program.
Some analysts have criticized Sony Ericsson for focusing too much on the more expensive mid-range and high-end phones, thereby missing opportunities in emerging markets. The average selling price of Sony Ericsson phones was 120 euros in the first quarter - compared with 65 euros for devices from market-leader Nokia.
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