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TELECOM

Sony cuts Sweden workforce by 15 percent

Sony said Thursday it would chop 15 percent of the workforce at its struggling mobile phone unit and move its headquarters to Tokyo from Sweden as the Japanese consumer electronics giant slashes costs.

Sony cuts Sweden workforce by 15 percent

The move to cut 1,000 jobs at Sony Mobile Communications comes about six months after Sony bought Swedish telecom company Ericsson’s share in their former joint venture, called Sony Ericsson, set up in 2001.

The joint venture struggled to launch popular smartphones amid stiff competition from rivals including Apple and South Korea’s Samsung Electronics.

On Thursday, Sony said the job cuts in Sweden, expected to be completed by 2014, were part of a bid to “increase operational efficiency, reduce costs and drive profitable growth”.

“We are accelerating the integration and convergence with the wider Sony group to continue enhancing our offerings,” Sony Mobile chief Kunimasa Suzuki said in a statement.

“A more focused and efficient operational structure will help to reduce Sony Mobile’s costs… and bring the business back to a place of strength.”

Sony, which makes PlayStation game consoles and Bravia televisions, has already said it would cut about 10,000 jobs worldwide and spend nearly $1.0 billion on an overhaul that its chief Kazuo Hirai described as “urgent”.

The Japanese firm lost a whopping 456.66 billion yen ($5.81 billion) in the year to March, its fourth consecutive annual loss.

It also reported a widening loss in its latest quarter and cut a profit forecast for the year as the struggling firm overhauls its business.

The losses have been particularly acute in Sony’s television business. Japanese electronics firms have been hurt by a strong yen, shrinking profit margins and stiff competition from foreign rivals.

Piracy has threatened its music and film assets while Sony was also hurt by

last year’s quake-tsunami disaster in Japan.

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BANKRUPTCY

Malmö smartwatch company Kronaby files for bankruptcy

The Malmö company behind the premium smartwatch brand Kronaby has filed for bankruptcy after an abrupt shift in strategy at its Chinese backers.

Malmö smartwatch company Kronaby files for bankruptcy
The Swedish actor Matias Varela has been hired to promote the watches. Photo: Kronaby
The filing, made on Wednesday, puts 60 people at risk of losing their jobs at the company’s offices in the city’s new Västra Hamnen district. 
 
Pål Borge, chief executive of Anima, told The Local that the company's majority owner, the Chinese electronics company Goertek, had decided to concentrate on their original business, component manufacturing, and shut down all of the brands they had begun to develop. 
 
“They decided to leave this branding business, and they also decided to do it extremely quickly, so they shut off all capital injection and support with immediate effect,” he said.
 
“They did this in December, so they left us one and a half months to find new investors, which was absolutely too short. We have a number of leads which we will continue to work on, but we have not been able to finalize them.” 
 
 Pål Borge came to the company after Sony Mobile. Photo: Anima
 
Kronaby was founded in 2015 by four executives from Sony Mobile, and launched its first 'hybrid' watches in 2017, taking on Apple by combining high-end materials and stylish design with almost invisible smart hardware. 
 
Revenues grew to over $50m last year, a 40 percent increase on the $37m worth of watches sold in its launch year, when it made a $127m loss. 
 
The watches, which range in price from about 2,000 kronor (around $215) to about 6,000 kronor (around $647), were positively reviewed by style magazines such as GQ.
 
Borge said the company had aimed to reach break-even by the end of 2019 and had only required a small further capital injection of a few million dollars to do so. 
 
“It was the final investment that could be done to make us break even,” he told The Local. “The biggest disappointment was that it was notified in such a short time, so we didn't get a real chance to find a new investor.”
 
Borge told Sydsvenskan that he hoped that the company’s administrators would be able to find a buyer or investor willing to come to the company’s rescue. 
 
“We have a platform ready and a business which should interest many, so our ambition is, together with the administrator, to find a solution,” he said to the newspaper. 
 
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