Sony to slash 1,000 jobs in southern Sweden

UPDATED: Nearly half of the work force at Sony Mobile's facility in Lund, Sweden, will be laid off in a money-saving move, the company confirmed at a press conference on Monday afternoon.

Sony to slash 1,000 jobs in southern Sweden
Sony Mobile chief executive Bengt Arne Molin at a press conference in Lund on Monday. Photo: Ola Torkelsson/TT

Staff were informed of the decision at a meeting in Malmö on Monday morning. 

"We had a meeting with all of our employees where the CEO (Kazuo Hirai) presented the structural changes from April 1st," Sony Mobile's chief executive in Sweden, Bengt Arne Molin, told reporters at a press conference on Monday afternoon.

"It has to be done even though it is painful and difficult for many to accept. But we will still be among the largest employers in the region and one of Sweden's leading hi-tech companies."

"Sony's future is at stake, we need to be profitable over the longer term," he added.

The 2,200 people working at the facility in Lund, including 400 consultants, will now be cut to 1,200.

"The decision was not altogether surprising," employee Bitte Hansson said to regional daily Sydsvenskan earlier on Monday.

Seved Andersson, vice chairman for engineers' union Sveriges Ingenjörer, told Swedish news agency TT that silence fell in the room when the layoffs were announced.

"We had expected layoffs, but I think the number surprised many. It feels that way, at least judging by reactions," he said.

Sony Mobile and the unions are now set to initiate negotiations, a process that is expected to take months.

A press release from Sony Mobile on Monday read: "To create long term profitability Sony Mobile has made a decision regarding a new organizational structure from April 1st, 2015. The goal is to create a more operationally efficient and fast-moving organization."

The news follows a long period of turmoil for Sony Mobile, which has struggled to compete with market leaders Apple and Samsung.

400 people lost their jobs at the Lund facility in 2013, after Sony Corporation bought Swedish firm Ericsson's share of Sony Ericsson in 2012 and changed its name to Sony Mobile Communications.

About a month ago the company announced it was cutting 2,100 jobs worldwide – about 30 percent of its total workforce – to drag its results out of the red. The mobile and tablet maker lost $1.2 billion in the fourth quarter of 2014 alone.

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Malmö smartwatch company Kronaby files for bankruptcy

The Malmö company behind the premium smartwatch brand Kronaby has filed for bankruptcy after an abrupt shift in strategy at its Chinese backers.

Malmö smartwatch company Kronaby files for bankruptcy
The Swedish actor Matias Varela has been hired to promote the watches. Photo: Kronaby
The filing, made on Wednesday, puts 60 people at risk of losing their jobs at the company’s offices in the city’s new Västra Hamnen district. 
Pål Borge, chief executive of Anima, told The Local that the company's majority owner, the Chinese electronics company Goertek, had decided to concentrate on their original business, component manufacturing, and shut down all of the brands they had begun to develop. 
“They decided to leave this branding business, and they also decided to do it extremely quickly, so they shut off all capital injection and support with immediate effect,” he said.
“They did this in December, so they left us one and a half months to find new investors, which was absolutely too short. We have a number of leads which we will continue to work on, but we have not been able to finalize them.” 
 Pål Borge came to the company after Sony Mobile. Photo: Anima
Kronaby was founded in 2015 by four executives from Sony Mobile, and launched its first 'hybrid' watches in 2017, taking on Apple by combining high-end materials and stylish design with almost invisible smart hardware. 
Revenues grew to over $50m last year, a 40 percent increase on the $37m worth of watches sold in its launch year, when it made a $127m loss. 
The watches, which range in price from about 2,000 kronor (around $215) to about 6,000 kronor (around $647), were positively reviewed by style magazines such as GQ.
Borge said the company had aimed to reach break-even by the end of 2019 and had only required a small further capital injection of a few million dollars to do so. 
“It was the final investment that could be done to make us break even,” he told The Local. “The biggest disappointment was that it was notified in such a short time, so we didn't get a real chance to find a new investor.”
Borge told Sydsvenskan that he hoped that the company’s administrators would be able to find a buyer or investor willing to come to the company’s rescue. 
“We have a platform ready and a business which should interest many, so our ambition is, together with the administrator, to find a solution,” he said to the newspaper.