1/21/2009 11:30:00 AM
Motorola and Sony Ericsson continue further cost cutting
Motorola and Sony Ericsson, two of the world’s most well-known phone manufacturers, signalled more evidence of their plight last week with a raft of further cost cutting.
Motorola is set to cut 4,000 jobs in addition to the 3,000 it announced in 2008, in a bid to reduce costs.
The majority of cuts will come from its mobile devices division to save $700m (£481m) in 2009, in addition to the $800m (£550) it said it would save in 2009 from its restructure last year.
Motorola will now focus almost completely on phones based on the Android operating system, rather than Windows Mobile. It is also scaling back the number of new handsets it will produce.
Last week, Sony Ericsson announced results that were worse than many analysts had expected, posting a £6.9m loss in 2008.
It laid out cost-cutting measures that aim to save another £180m in addition to the £300m it announced in its restructure last year.
Sony Ericsson reported handset shipments of 24.2 million in 2008 – a 21% fall from the same period in 2007.
Global chief Dick Komiyama is now looking to turn the company into profit at the expense of market share. He said: ‘We foresee continued deterioration in the market place in 2009, particularly the first half.’
Both companies have been pulled into a vicious circle of poor designs, low sales and little money to invest in new research and development.
Meanwhile, the Samsung Group has announced a global reshuffle, which will see its four business units merged into two. Samsung Mobile’s head and president, Choi Gee-sung, will lead the merged consumer electronics and mobile arms in the new digital communications division.
LG announced earlier this month that it had also restructured its business units, in a move that saw its mobile communication division’s executive vice president and CEO, Skott Ahn, promoted with more influence in the business.