It is no secret by now that Sony has not been doing well in the smartphone market. The Xperia Mobile division, credited for innovative devices like the Sony Ericsson Xperia Play and many others, has ceased to exist on its own and integrated into the “Electronic Products and Solutions” division. Now, more bad news comes through Sony’s latest financial statements which indicate that the smartphone division bled a lot of money in recent months, and a new report indicates that this could translate into Sony laying off half of its smartphone workforce due to shrinking sales.
Sony’s smartphone sales for 2018 are expected to be around 6.5 Million units, which is half the figure from the previous year, and a mere one-sixth of the figure from five years ago. For more context, devices like the Redmi Note 7 series sold 1 Million+ units in one month of sale in India alone — that is one phone lineup in one country in one month; this really puts into perspective the number of devices Sony sold across its entire lineup around the world in a whole year.
Sony’s smartphone business is expected to continue posting operating losses for the third straight year in 2019. Sony has been trying to halve its operating expenses from the figures of 2017 due to rapidly declining sales, and the company hopes that the business will turn a profit by 2020.
But to reach this profitability, Sony will be cutting down its smartphone workforce to just half. This decision will see only 2,000 employees out of the total 4,000 employees remaining within the smartphone business. Employees in Japan affected by the shrink will be transferred to other divisions, while employees in Europe and China shall be offered voluntary retirement. Sony will also limit its smartphone sales in Southeast Asia, which is seen more as a market for budget and mid-range devices, and the company will focus its efforts on Europe and East Asia, markets which have higher appetite for costlier smartphones.
It remains to be seen how long Sony remains within the smartphone business. The smartphone industry is extremely competitive and generally surviving on thin profit margins, and is also suffering from one of the worst global slowdowns in overall smartphone shipments.
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