The collaboration between Japan’s Sony and Sweden’s Ericsson has announced a 2000 job cuts with a mind on reducing costs and prevent the company of loosing too much money. The problem is, the company wins, workers loose.
This is not a marketing step as Nokia did when moved a factory in Romania, Sony Ericsson simply cuts job to ensure minimal expenses after the company failed to achieve high profits in Q2. The company says they have earned just $9.5 million in the second quarter, but last year their profits were $347.6 million.
Sony Ericsson will leave 2000 people without a job because the company hopes to recover lost profits with $470 million thanks to this move. The company already warned investors last month that the results are not those expected and they might be lesser than that. It seems their rivals, Nokia or LG, have done pretty well in comparison.
Sony Ericsson pursued a marketing strategy that said the mobile phone sales will rise to 10 per cent this year. Their devices are very elaborate with the latest features. But it seems this way was not as profitable as expected. LG or Nokia did well selling basic need mobile phones. Sony Ericsson is focusing more on the upcoming markets and their analysts said unit sales will rise up to 10 per cent.
Sony Ericsson wants to do about $470 million in cost cuts each year. Well, they will probably keep on firing people if their profits are not billions high.