Sony Mobile Lays off a Thousand Workers, will Move Headquarters to Tokyo

Sony Mobile Communications is laying off about a thousand workers and in October will move its headquarters from Lund, Sweden, to Tokyo.

The layoffs represent about 15 percent of its total employees, and will be complete by March 2014. The reductions will help reduce operating costs.

The move also forms part of a streamlining effort to increase smartphone sales.

Some 650 of the affected employees currently work in Lund. Consultants are also affected by the layoffs.

Sony will keep software and application development in Lund.

In addition, Sony says it is reorganizing operations in order to improve time to market, supply chain management and create more integration with the wider Sony business.

“We are accelerating the integration and convergence with the wider Sony group to continue enhancing our offerings, and a more focused and efficient operational structure will help to reduce Sony Mobile’s costs, enhance time to market efficiency and bring the business back to a place of strength,” Kunimasa Suzuki, president and CEO of Sony Mobile, said in a company statement.

In February, Sony took complete control of the mobile phone joint venture with Telefon AB L.M. Ericsson.

There is room for growth. Sony had about four percent of the smartphone market worldwide during Q1, while Samsung had 31 percent and Apple had 24 percent, according to data from Strategy Analytics.

Smartphones are important to Sony, and improvements in the sector are part of the turnaround plan from Sony CEO Kazuo Hirai. Sony may also try to increase its entertainment offerings – such as video games – in its smartphones, The Journal added.

“Sony has identified the mobile business as one of its core businesses and the Xperia smartphone portfolio continues to gain momentum with customers and consumers worldwide,” Suzuki said in a statement.

During Q1, Sony’s mobile products division saw a loss of $357 million.

In its review of Sony’s latest move, The Register said that, “Taking the operation home isn't terribly surprising, Lund was always Ericsson's preference.” Being in Tokyo also lets Sony Mobile be close to Sony's other product divisions.

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