Sony Ericsson to shut down Chennai unit

Handset-maker Sony Ericsson on Thursday said it will shut down its development centre in Chennai as part of its move to cut jobs globally.

The Chennai unit, with less than 60 employees, was one of the eight global R&D centres for the company. The company has shut down three other centres including one in the US and in the Netherlands. It has, however, retained four research centres in Beijing, Tokyo, Sweden and Redwood Shores (US). 

Speaking to Business Line from London, Aldo Liguori, Corporate Vice-President and Head of Global Communications and PR, Sony Ericsson, explained that the centres that have been closed were picked on the basis of the level of expertise.

“The Chennai centre was primarily doing development for low-end phones. We have decided globally to focus back on mid- and high-end phones. The Beijing centre, for example, has been retained because it is already doing work on 3G phones. The centre in Tokyo has been working for years on cutting edge technologies so that’s been untouched. Even though the Indian market is readying for 3G, it would have been difficult to shift any work from Beijing to Chennai,” Ligouri said.

He added that the move in no way dilutes Sony Ericsson’s commitment to the Indian market. “Our quarterly results have not been good and our first objective is to turn the company around. India is important to us and there is no change in the marketing and sales operations. It is business as usual,” Liguori said.

As part of its restructuring programme that started a year ago, Sony Ericsson plans to reduce headcount globally by 2,000 people. The company intends to complete its programme by mid-2010.

The mobile handset maker’s third-quarter loss widened following a sharp drop in the number of units shipped. The joint venture between Japan’s Sony Corp and Sweden’s Ericsson AB reported a loss of 164 million euros (USD 245 million) in the third quarter, against a loss of 25 million euros in the same period a year ago.

“Sony Ericsson confirms that it is continuing its business transformation programme, as announced previously, and is making changes to its global organisation to reduce costs and increase efficiencies. The principal aim of the company is to return to profitability as soon as possible,” said a statement.

Taken from Business Line