Sony Ericsson is to cut a further 2,000 jobs off the back of a first-quarter pretax loss of EUR358 million. The new round of layoffs – which follows 2,000 previously announced cuts as part of another savings drive, now completed – was not expected by the market, although its widened first-quarter pretax loss was in the range of a warning issued last month. Its net loss came in at EUR293 million. “As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand,” said Dick Komiyama, company president (pictured, above left), in a statement. “We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible. The management intends to pursue an additional cost saving programme targeting a further annual operating expense reduction of EUR400 million, to be completed by mid-2010.” In the first-quarter, the vendor said it shipped 14.5 million phones, a decrease of 35 percent compared with the same period last year. Sales for the quarter were EUR1.7 billion, a decrease of 36 percent from a year ago.

The vendor said it lost market share in the quarter, estimating its share to be around 6 percent, down 2 percent sequentially. Sony Ericsson expects the global handset market will contract “at least 10 percent” this year, a slightly more pessimistic forecast than Nokia’s prediction yesterday of an approximate 10 percent decline. Like Nokia though (see separate story below), Sony Ericsson claims to have seen some signs of stabilising consumer demand. “In March there were signs of stabilisation… in the US and in Europe,” Komiyama told Reuters. “Still, in some areas we still have weakness, in Eastern Europe, in Russia, the Middle East and India, but some other areas have clearly started seeing some signs of correction.” Komiyama did not put a timescale on returning to profitability, but declared that “we are confident we have the right products and the roadmap to wow customers again.” He also played down previous fears that either of the venture’s parents could break-up the company. Analysts were sceptical of the vendor’s hopes. “Slowing consumer demand and inventory burn out might explain part of the poor performance, but it does not hide the fact that Sony Ericsson is facing some internal issues,” Wireless Intelligence’s Joss Gillet told Mobile Business Briefing. “Sony Ericsson has already announced that it aims to rationalise its portfolio of devices and will focus on high-end consumer segments to generate higher margins. In difficult market conditions, one key factor of success that will be critical is time to market. If the manufacturer fails to make a quick success story out of its Entertainment Unlimited strategy before year end, the result could be very disappointing indeed.” On that note, Sony Ericsson today said that the next Entertainment Unlimited announcement will take place on 28 May.