Sony to Cut 1,000 Jobs to Reduce Costs at Mobile Unit

Sony Corp. (6758), Japan’s largest exporter of consumer electronics, is eliminating about 15 percent of its mobile-phone unit’s workforce to reduce costs at a business that trails Apple Inc. (AAPL) and Samsung Electronics Co.

The reduction of about 1,000 jobs will mainly be in Sweden, Sony said today in a statement. About 650 positions will be cut from its mobile division’s headquarters in the town of Lund, and the rest will primarily be consultants in the Nordic country. The unit’s headquarters will move to from Lund to Tokyo, where Sony is based.

Sony is shrinking its global workforce by about 6 percent, closing plants and reorganizing its businesses after posting a 457 billion-yen ($5.8 billion) net loss for the year ended March 31 amid slumping demand for its Bravia TVs, competition from South Korean rivals and a strong yen, which erodes earnings from overseas. The Tokyo-based company on Aug. 2 cut its profit forecast for this year to 20 billion yen from 30 billion yen.

“We are accelerating the integration and convergence with the wider Sony group to continue enhancing our offerings, and a more focused and efficient operational structure will help to reduce Sony Mobile’s costs, enhance time to market efficiency and bring the business back to a place of strength,” Kunimasa Suzuki, president of Sony Mobile, said in the statement.

Global Competition

Sony will probably eliminate 700 jobs this fiscal year and about 300 jobs next year at the mobile-phone unit, Keita Sanekata, a Tokyo-based spokesman, said by phone today, adding that the cuts are part of a 10,000 worker reduction plan.

Sony’s TV and mobile-phone businesses “continue to be plagued by structural challenges, such as the commoditization and maturity of major products, rapid technological changes, and intense global competition,” Moody’s Investors Service said in a statement on Aug. 6, when it placed Sony’s credit ratings under review for a possible downgrade.

Sony’s shares fell 0.3 percent to 929 at the close of Tokyo trading and have plummeted 33 percent this year.

Sony bought Ericsson AB (ERICB)’s half of their 10-year-old mobile- phone joint venture Sony Ericsson Mobile Communications AB for 1.05 billion euros ($1.3 billion) in February.

Sony, which makes the Xperia handset, had a 4.2 percent share of the global smartphone market last year, lagging behind Nokia Oyj, HTC Corp. and Research In Motion Ltd., according to researcher Gartner Inc. Apple topped the ranking with 18.9 percent market share, followed by Samsung with 18.5 percent.

To contact the reporters on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net; Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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