Sony Corp (ADR) Facing Trouble With Its Mobile Division


Sony Mobile, the mobile making division of Sony Corp (NYSE:SNE), is facing the consequences of failure in the international market. The company has decided to restructure its management and operations. As a part of this, the company is cutting 1000 jobs in one of its key manufacturing center in Sweden.

According to the latest news, the company has planned to execute restructuring on a larger scale to bring back profitability in the handset making division. Nearly 2100 employees of the company will be relieved from their jobs in this fiscal year.

The lay off in Sweden is part of this global reduction of employees. Among the 1000 employees to be cut off in Sweden, 575 are staff whereas 400 are contract positions. These are spread across all divisions including administrative and technical staff. A local publication from Sweden called 8till5 first reported the news. It was confirmed by the company in a statement. The statement mentioned that the company the company is changing organizational structure effective from April 1st of this year. The company has released redundancy notification to Swedish authorities recently in this manner.

The layoff has left the operating center at Lund, Sweden with only half of its staff. However, Sony Corp (NYSE:SNE) maintains that Lund will continue to be an important site for the company. Software development and customer focus will be the main focus of this operations center.

According to the company, the mobile division will cost an operating loss of 39 billion yen (approximately $315 million) in this fiscal year alone. The jobs cuts were initially expected to be limited to China and Europe, however, initial reports in March had indicated possible job cuts in Lund. While, these job cuts may bring some financial relief to the troubled mobile division, the company will continue to struggle for a year or so before any profits are seen.