Sony Mobile is laying off 1,000 employees and will also move its global HQ to Tokyo, as the company tries to turn around its dwindling fortunes in the smartphone space.
The reorganization comes about six months after the company became a wholly-owned subsidiary of Sony, following Sony's acquisition of Ericsson's 50 percent stake in their joint venture, Sony Ericsson Mobile Communications.
In October, Sony Mobile will move its corporate headquarters and other functions from Lund, Sweden to Tokyo. The Swedish town will be the hardest hit by the changes as around 650 employees there across a number of functions will be affected by the job cuts, according to a statement.
However, the Lund office will not be closed, as about 2,000 people will continue to work on software and application development, a Sony Mobile spokesman said.
The remaining headcount reductions will primarily consist of consultants in Sweden. The redundancies represent about 15 percent of Sony Mobile's global headcount, and the staff trimming is expected to be finished by the end of March 2014.
The goal is to save money to help the company become profitable, but Sony Mobile will have to convince more consumers to buy its devices for that to happen. It is now accelerating its integration and convergence with the wider Sony portfolio to help make its products more desirable, Sony Mobile CEO Kunimasa Suzuki said in a statement.
Sony Ericsson and now Sony Mobile have struggled to keep up with smartphone market leaders Apple and Samsung, as well as smaller Android competitors like HTC and Motorola. It is no longer one of the ten biggest phone makers in the world by volumes, according to Gartner's data for the second quarter.
Sony is due for a product refresh, and those smartphones will be the first truly Sony created and branded phones, according to Ben Wood, director of research at CCS Insight. But success will not come easily.
"Sony Mobile is going to have a tough time getting traction in the market place, but it is not going to go away because it is such an important part of the Sony conglomerate and its multi-screen strategy," said Wood.
The next chance for the company to show how it will turn around its fortunes is at the IFA consumers electronics show, which will take place next week in Berlin.