STOCKHOLM - Mobile phone maker Sony Ericsson on Friday posted a euro293 million (US$387 million) net loss in the first quarter on falling sales and said it would slash an additional 2,000 jobs to cut costs.
The result was the third consecutive quarterly loss for the Sony Corp. and LM Ericsson AB cellphone joint venture, which reported a profit of euro133 million in the same period in 2008.
Sales in the January-March quarter tumbled by 36 per cent to euro1.7 billion, from euro2.7 billion a year ago.
Sony Ericsson attributed the sales drop to weaker demand for mobile phones as distributors and retailers trim their inventories amid the global recession and a slowdown in demand.
The company shipped 14.5 million mobile devices in the quarter, down 35 per cent from a year ago.
"As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand," company President Dick Komiyama said in a release. "We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible."
He said Sony Ericsson plans a new round of restructuring aimed at reducing operating costs by euro400 million by the middle of next year. About 2,000 jobs would be cut as part of the savings plan, which was estimated to cost about euro200 million to implement.
Sony Ericsson had earlier laid off 2,000 workers as part of a previous streamlining program.
Some analysts have criticized Sony Ericsson for focusing too much on the more expensive mid-range and high-end phones, thereby missing opportunities in emerging markets. The average selling price of Sony Ericsson phones was euro120 in the first quarter -- compared with euro65 for devices from market leader Nokia Corp.
Nokia on Thursday reported a 90 per cent plunge in the first quarter, but shares surged as the Finnish company maintained its industry outlook and target of increasing market share this year.
