Sony Ericsson will cut another 2,000 jobs as profits continue to plummet, dropping a further 41 per cent compared with the previous quarter.
Announcing its first quarter results Sony Ericsson revealed a pre-tax loss of €370 (£327) million, down from a profit of €193 million in Q1 2008 with sales dropping 35 per cent year on year.
“It has been a difficult quarter and we expect it continue through 2009,” said Sony Ericsson president Dick Komiyama (pictured). “We are aligning our business to the new market and the management intends to pursue an additional cost saving program targeting a further annual operating expense reduction of €400 million by mid 2010.
“This program will include a further reduction in the global workforce of approximately 2,000 people.”
The continued drop in sales has come as little surprise to analysts, who believe that there is more to the bad results than the economic climate.
“Although Sony Ericsson continued to blame lower demand and inventory de-stocking for the weak performance, Gartner believes that the company’s current portfolio is contributing to these factors,” said Gartner research director Carolina Milanesi. “Imaging and music are now part of most of the competitors’ portfolios and Sony Ericsson is finding it more and more difficult to have its products stand out.
“The ‘Idou’ device presented in Barcelona is certainly a step in the right direction for Sony Ericsson but one cannot help but wonder if it will be too little too late given it will only be on the market at the end of the year.”