Sony Ericsson to cut 2,000 jobs as profits tumble (handset manufacturer )

[Omaha Steve]

http://news.zdnet.co.uk/communications/0,1000000085,39448971,00.htm

David Meyer ZDNet.co.uk

Published: 18 Jul 2008 17:17 BST

Sony Ericsson barely broke even in the second quarter of 2008, prompting fears among analysts over the company's prospects for the rest of the year.

On Friday, the handset manufacturer announced a quarterly net profit of just €6m (£4.8m), down from €220m (£174.6m) in the same quarter last year. Sony Ericsson is going to shed 2,000 jobs as a result, although this figure includes contractors and consultants. Gartner analyst Carolina Milanesi told ZDNet.co.uk after the announcement that, during the ensuing analyst call, the mood surrounding the results was downbeat.

"We knew what to expect from Q2," she said. "Sony Ericsson has moved into the lower segment of the market, but timing was not on their side. impact on replacement sales in emerging markets, where the ultra-low-cost handsets that Sony Ericsson is not addressing. But the problem they have is also that, while that is not happening, the softening of the high-end market in Western Europe is not helping them."

Milanesi said that the analyst call had surprised her, even though she had gone in knowing the issues that Sony Ericsson faced. "What I'm more concerned about is the outlook for the rest of the year," she said. "Listening to the call today, it's as if have already given up on the rest of 2008. They don't believe upcoming products will make a considerable difference in the current situation."

FULL story at link.