Sony Ericsson’s plummeting Q2 profits and the economic climate will see it axe around 2,000 jobs across the globe as it seeks to cut €300 million per year of costs.
Sony Ericsson posted a 97 per cent drop in Q2 earnings, compared with the same period last year.
Sony Ericsson president Dick Komiyama said: "We are aligning our operations and resources worldwide to meet an increasingly competitive business environment and to help restore our capability for profitable growth. The measures we are taking are aimed at becoming a faster, more agile and more cost efficient organisation that can continue to create innovative products that excite consumers.
"Our target is to achieve a reduction in operating expenses of €300 million annually, with the full effect expected to appear within a year. We estimate that our restructuring charges will be of the same magnitude as our reduction in operating expenses, and we will incur such charges as our measures are implemented."
Sony Ericsson shipped 24.4 million units in the quarter ended June 30. Sales were €2,820 million, a decrease of nine per cent year-on-year. It cited "unfavourable exchange rate fluctuation, continued slowing market growth in mid- to high-end phones and increased competition."
Gross margin also decreased compared with a year ago reflecting a less favourable product mix, with particular impact in Europe, and increased price competition in general.