Page last updated at 07:05 GMT, Friday, 17 April 2009 08:05 UK

Sony Ericsson to cut 2,000 jobs

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

Mobile phone maker Sony Ericsson is to cut a further 2,000 jobs as it seeks to make 400m euros of savings.

It comes as the firm revealed a pre-tax loss of 358m euros ($469m; £316m) in the first three months of this year.

"As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand," the firm said.

The job cuts come on top of 2,000 previously announced as part of another savings drive, now completed.

"The management intends to pursue an additional cost saving programme targeting a further annual operating expense reduction of 400m euros, to be completed by mid-2010," said Sony Ericsson president Dick Komiyama.

Market contraction

Sony Ericsson will take a 200m euros charge in order to shed the 2,000 jobs and implement the cost saving programme.

The firm said over the past 12 months the average selling price of its units had fallen by one euro to 120 euros.

The news comes a day after Nokia, the world's largest mobile phone maker, reported a 90% fall in profits for the first quarter of 2009.

Sony Ericsson, the world's number four mobile phone maker, said it had shipped 14.5 million phones during the first quarter, a decrease of 35% compared with the same period last year.

Sales for the quarter were 1.7bn euros, a decrease of 36% from a year ago.

Sales fell primarily as a result of continued weak consumer confidence, and both retailers and distributors cutting their stock.

Like Nokia the day before, Sony Ericsson also forecast that the global handset market for 2009 would contract by at least 10%.

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