Ericsson to cut workforce, losing money through Sony partnership

The partnership between Swedish telephone company Ericsson and electronics giant Sony has been struggling for quite a while, with a straight year of losses recently reported.

Ericsson has now announced that 1,000 employees will be laid off due to a 74 per cent drop in net profits over the last quarter. The job losses will come as Ericsson closes the doors on its design and manufacturing facility in Gävle, and reducing staff at its Boras operation.

"We must reduce our production staff because the labour requirement for our products is diminishing as we increase efficiency," says Ericsson chief executive Carl-Henric Svanberg. "It's a tough day for us today."

Despite the semi-positive 'increased efficiency' spin put on the lay-offs, much of the losses have been attributed to the suffering Sony partnership, which has struggled to break into the feature rich phone market after significant problems with its flagship device, the Satio.

This follows 5,000 previous job cuts made by Ericsson at the beginning of 2009, 1,000 of which were also in Sweden.