Sony's Mobile division is reported to be cutting almost 1,000 jobs in Sweden, amidst mounting losses and a rapidly shrinking market share. The report, first carried by Swedish publication 8till5, has been confirmed by the company, according to TechCrunch. The factory cum R&D center in the middle of the current restructuring attempt is located at Lund, in Southern Sweden, where 575 full-time staff and 400 contract workers are going to be made redundant. With the layoffs, there will only be 1,200 workers remaining at the Swedish facility, which is a remnant of Sony Mobile's former alliance with Swedish telecom equipment maker Ericsson, whereby, the joint venture produced mobile handsets under the Sony-Ericsson brand till 2012.
Sony Mobile, which has been losing money for several quarters now, is said to be putting in place a blueprint it believes will help it restructure and get back to profitability by FY2017, led by Mr. Hiroki Totoki, who was appointed as the head of Sony's Mobile division late last year. Towards that end, the company had already announced plans for massive lay-offs in February this year, totaling around 2,100 workers across Europe and China. Next month, in March, there were reports that 1,000 of those proposed 2,100 job cuts will come from the Swedish facility. Meanwhile, Sony's President of North West Europe, Mr. Pierre Perron, also announced last week that he would be leaving the company.
Sony has had to overcome stiff obstacles in recent times, including heightened competition from rivals like Apple and Samsung at the higher end, and a whole host of Chinese and Indian manufacturers at the entry-level in some of the most lucrative and high-growth regions around the world. As if that wasn't enough, the exchange rate has also dealt the company a cruel blow, with the Japanese Yen appreciating substantially against the US dollar. Sony is not one of the top ten smartphone manufacturers in the world according to research and advisory firm Gartner, but the company reportedly holds 2% of the overall market and is the ninth largest manufacturer of mobile handsets, when feature phone sales are included.
While Sony has denied rumors about exiting the phone manufacturing business altogether, Mr. Totoki has confirmed plans of shutting shop in some markets, where it believes it will continue to struggle in the foreseeable future. As part of its earnings call, the company has said that while its mobile division is likely to make a loss of around $315 million dollars in FY2016, the Sony Group as a whole expects an operating profit of $2.6 billion.