Sony Ericsson and Toshiba issue 5,900 pink slips
Sony Ericsson succumbed to rapidly falling global handset sales. The number of units it shipped in the first quarter dropped 35 percent compared with the same period last year, and the joint venture posted a 293 million-euro ($382.7 million) net loss. Experts say that global handset sales could be down 10 percent this year. The Sony Ericsson numbers and figures from Nokia (NOK) indicate that the number may be too optimistic.
Sony Ericsson did what most firms do when they lose money. It fired 20 percent of it staff, or about 2,000 people.
The news is also an indication the the old Japanese concept of lifetime employment has taken another serious body blow.Another electronics company also decided that demand for its products is not likely to rebound anytime soon. According to CNNMoney, "Toshiba said 3,900 contract workers would be cut by March 2010 as the company deals with growing losses. Toshiba also announced that it might have lost more money in fiscal 2008 than officials had originally forecast." It is not the first time that management slip ups on predictions have cost people jobs, and it will not be the last.
Douglas A. McIntyre is an editor at 24/7 Wall St.