More job cuts are coming, Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) president Bert Nordberg warned, announcing horror-show Q4 and 2009 earnings blamed partly on customers flocking to touchscreens.
“Continued cost saving activities and resource realignment are necessary in order to build a leaner, more efficient organisation,” Nordberg (pictured) said in the announcement.
Q4 phone shipments were three percent back up from Q3 (thanks to Satio and Aito models) – but they join company revenue in being a horrible 40 percent below last year. This is “mainly due to a downturn in the global handset market and a faster than anticipated shift to touch screen phones in the mid-priced sector of the market”.
Annual losses ballooned from €73 million ($103.1 million) in 2008 to €836 million ($1.18 billion) in 2009, though Q4 losses were largely stable from Q3 at €167 million ($236 million).
Sony and Ericsson had to step in last year to pump €175 million each in to the handset maker, part of a €455 million ($642.8 million) refinancing program. The company has used up €255 million of it.
It’s still in the middle of a 18-month-old restructuring to shave €880 million ($1.25 billion) off costs that has seen it cut its workforce by 2,500 to 9,100. So far, the restructuring has already cost it €339 million and the effects won’t come down the pipe until this summer – but the company says total layoff costs will be “well within” a budgeted €500 million.
Sony Ericsson reckons the market for mobiles dipped eight percent last year, and it had five percent market share. For 2010 handsets, it’s forecasting “slight growth.”
How on earth is Sony Ericsson going to get out of this hole? “By establishing Sony Ericsson as the communication entertainment brand based on an exciting portfolio of mid- and high-end products, such as our recently announced Android-based phone, the Xperia X10,” the earnings announcement says.