Page last updated at 15:17 GMT, Friday, 18 July 2008 16:17 UK

Sony Ericsson to axe 2,000 jobs

Sony Ericsson handset
Sony Ericsson is one of the world's largest makers of mobile phones

Mobile phone maker Sony Ericsson has said it will shed 2,000 jobs worldwide over the coming year to cut costs.

The news came as Sony Ericsson reported an operating loss of 2m euros ($3.1m; 1.59m) for the second quarter, against a profit of 315m euros a year ago.

Sony Ericsson said it was aiming to cut operating costs by 300m a year.

In June, the company had warned its profits would be less than previously forecast as demand for expensive handsets waned.

Sales in the quarter fell by 9.4% to 2.82 bn euros.

A company spokesman said a review of all operations, including those in the UK, would be taken before any decisions were made about where jobs would be cut.

Spending squeeze

The company is a joint venture between electronics firm Sony and telecoms equipment maker Ericsson.

Consumer demand has been hurt by a credit crunch that has prompted banks to withdraw many loans and mortgages.

As a result, many consumers have had less money to spend and have had to cut back on their outgoings.

The slowdown in many of the world's largest economies such as the US, UK and Japan has hit both consumer and corporate spending.

'More agile'

Sony Ericsson has been trying to do more business in emerging markets, as European trade reaches near-saturation levels.

That has meant the sale of more low-end, less costly, phones.

"Our target is to achieve a reduction in operating expenses of 300m euros annually, with the full effect expected to appear within a year," Sony Ericsson chief executive Dick Komiyama said.

"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."

Sony Ericsson warns over profits
27 Jun 08 |  Business
Mobile sales on slide in Europe
28 May 08 |  Business

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