Sony all set to scale back its smartphone division


In the face of growing competition and steadily declining sales, the once-iconic brand of Sony has decided to slash its mobile division workforce by half by 2020. The move will possibly result in approximately 2,000 staffers either losing their jobs or getting shifted to a new department within the company.

According to a research portal Statistica, Sony’s share of the smartphone market has fallen sharply in recent years – from more than three percent in 2010, to less than one percent right now. The Nikkei Asian Review reported on Friday saying, “Sony has struggled to compete against leaders Apple, Samsung Electronics and Huawei Technologies, all of which are racing to develop new 5G devices.”

The Tokyo-headquartered company is planning to cut smartphone sales in Southeast Asia and other areas to focus on markets like Europe and East Asia.

The Nikkei report also said that “The company’s smartphone sales for fiscal 2018 are projected to come in at a dismal 6.5 million units, half the previous year’s figure and just one-sixth that of five years ago. In fiscal 2014, Sony pulled 1,000 employees from its smartphone operations but sales have plunged faster than expected, necessitating a further round of cuts. Sony’s smartphone business generates annual revenue of about 500 billion yen but is expected to post an operating loss for the third straight year through fiscal 2019. By halving operating expenses from fiscal 2017, the company hopes the business will turn a profit by fiscal 2020.”

Some of Sony’s Japanese employees hit by this cost-cutting measure will be transferred to other divisions in the company, and the firm will also offer voluntary retirement in its Europe and China operations.

There’s been a general trend of decline that is being witnessed in the smartphone business lately. While Sony’s smartphone business is witnessing quite the downturn, itsTV business is still doing quite well.