Sony confirms 2,100 smartphone job cuts, primarily in China

Sony plans to shed a total of 2,100 jobs in its smartphone division by March 2016, with a significant workforce reduction to take place in China due to its lacklustre performance in the market.
Written by Cyrus Lee, Contributor

Despite the sales of its Xperia smartphones picking up in the last quarter, Japanese technology giant Sony announced that it would cut 2,100 jobs in its struggling mobile communications segment by March next year, with job losses mostly to take place in China and Europe, according to a Sohu news report on Thursday.

The total 2,100 layoffs, once completed, will trim Sony's mobile division to about 5,000 employees, representing a 28 percent reduction in the segment.

Sony said it will likely record a net loss of 170 billion yen ($1.4 billion) for 2014, according to preliminary results released on Wednesday. The ailing electronics conglomerate has been shedding business units under a restructuring plan spearheaded by its CEO Kazuo Hirai.

Despite smartphone sales increasing to 11.9 million in the quarter to December 31, 2014, from 10.7 million for the same period the previous year, Sony further lowered its forecast, expecting to sell only 39.2 million units in the fiscal year that ends in March -- compared with its initial projection of 50 million smartphone sales made in April last year.

Sony's sliding handset sales were mainly due to the weak performance in the Asia-Pacific region, particularly in China, according to the Sohu report. Sony's CFO said the company is cutting back on the launch of new Xperia models, and will no longer develop new smartphones for China.

According to the Sohu report, this means that Sony has made up its mind to scale back smartphone investment in China, and will not introduce new customised smartphone models with China's three major carriers of China Mobile, China Unicom, and China Telecom.

A TrendForce research report in January indicated that smartphone shipments of Chinese brands reached 453.5 million units in 2014, accounting for nearly 40 percent of its global total shipments of 1.17 billion units. Sony's total shipment dropped to eighth place worldwide in 2014, with market share sliding to 3.9 percent. The research estimates that Sony's rank will further slide to 10th place, with a market share of 3.1 percent in 2015.

However, the Sohu report also pointed to third-party research showing that Sony's smartphone sales were already edged out of the top 10 brands in 2014.

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