Sony Ericsson to Axe 2000 Employees

July 18th, 2008 at 12:00 am

sony ericsson

Sony Ericsson, the partnership that started to make great mobile handsets a few years ago has seen some better days.  They recently released their second quarter earnings for 2008 and the figures are looking dire.

Last year, in Sony Ericsson earned about 220 million Euros in the second quarter, this year, they are experiencing a whopping 97% slip to only 6 million euros.  The reason is not the number of units they shipped, actually the number of handsets they sold for the same time period as last year was nearly the same,24.9 units in 2007 and 24.4 units in 2008.  This year however, the margins for selling each unit are a lot  lower, hence the 97% decrease in revenue.

According to the company, the world economy is to blame.

So as a solution to keep their investors, Sony Ericsson has put forward a few cost cutting countermeasures, that will save the company 300 million euros annually for the next year or two.  In opther words, downsize their staff by about 2000 employees.

"We are aligning our operations and resources worldwide to meet an increasingly competitive business environment and to help restore our capability for profitable growth," said Sony Ericsson President Dick Komiyama. "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." 

However, Sony ericsson is not considering making en masse lower end phones.  they will maintain their high end units and marketing with less staff.