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Sony mulls hundreds of job cuts

Aug 22 2012 16:29 Reuters

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Stockholm - Sony Corp is considering hundreds of layoffs at a mobile phone plant in Sweden, a newspaper reported on Wednesday, in what would be one of the first major strategic decisions by the Japanese company on its former joint venture with Ericsson.

Sony Chief Executive Officer Kazuo Hirai is under pressure to reverse the fortunes of his company, which this month slashed its 2012/2013 operating profit forecast.

After Sony took over the struggling Sony Ericsson mobile phone venture at the start of this year for $1.3bn, renaming it Sony Mobile, fears were raised that a plant at Lund in southern Sweden would be in danger as Sony aimed to cut costs.

Daily Sydsvenskan quoted sources as saying Sony Mobile was considering a cut ranging from several hundred to up to 1 000 of the roughly 3 000 staff and consultants at Lund.

This would be part of a plan to move mobile phone hardware design and development to Japan and keep software development in Sweden. Sony Mobile spokesman Gustaf Brusewitz declined to comment on the report. Unions also declined to comment.

One source close to the discussions said a statement would come out on Thursday morning, but declined to give any details of its content.

Stefan Olsson, an industry analyst at Alandsbanken, said he thought it was possible some jobs woule be moved to Japan.

"Strategy and the integration of product development with the rest of Sony would be the main reason," Olsson said.

The job cuts would be on top of the 149 already planned at the research and development centre in Lund, which were announced in April.

The future of the Lund site has been in question since Sony bought out Ericsson, as Sony Ericsson had been losing market share and the company was trying to cut costs.

The mobile phone unit is just one of the worries for Hirai as he tries to close the gap with Apple Inc, Samsung Electronics Co Ltd and Microsoft Corp.

In April, Hirai outlined a revival plan that stakes Sony's future on mobile devices such as the Xperia smartphone, gaming and digital imaging, while developing new businesses, including a medical unit. So far he has failed to convince investors of a turnaround for the company behind the Bravia TV and Vaio laptop.

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