In the first quarter 2009, mobile handset manufacturer Sony Ericsson saw its sales shrink by almost 40 percent compared to the quarter before. Unit sales declined by the same percentage. Now the company announced another round of job cuts.

The current market environment is what Sony Ericsson in a press release conservatively called "challenging". The entire sector is under pressure, but compared to competitor Nokia, Sony Ericsson was hit even harder. While the Finnish handset vendor remained profitable at least, Sony Ericsson widened its loss. Operating loss increased to €369 million (about $483 million), up 41 percent from Q4/08. In the first quarter 2008, the company still had made an operating profit of €184 million.

The number of units shipped declined 40 percent against Q4/08 to 14.5 million units. This decline significantly surpasses Sony Ericsson's own predictions regarding the total market volume for 2009: The company says it expects the market volume for the current year to decline by "at least" 10 percent. Against this background, Sony Ericsson also lost market share; currently it is 6 percent, down 2 percentage points, according to the company's own figures.

While the company disposes of € 1.1 billion in cash, under the pressure of its towering losses it announced another cost reduction program in addition to the one already under way. While the company did not elaborate on the savings target, it said it will be associated with costs of €200 million. The program includes the reduction of the company's global workforce by about 2000 persons.

By: Docmemory
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