Sony Ericsson to wind up Chennai R&D centre, 3 other units globally
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ERICY | Quote | Chart | News | PowerRating -- CHENNAI, India -- Even as the global economic crisis is showing signs of recovery, mobile handset maker Sony Ericsson said it plans to close four of its centres globally, including the company's R&D centre in Chennai, which employs around 60 engineers.
When contacted by ET on Thursday, a Sony Ericsson spokesperson confirmed that his company plans to shut the Chennai centre.
"We opened a site in Chennai in 2007 to focus on entry-level phones. But, since then, we have been severely impacted by the financial situation and we've been unprofitable for a number of quarters. We are looking at how we can return to profitability, so we have decided to focus on the mid-end to higher-end phones," Sony Ericsson's corporate vice-president and head of global communications Aldo Liguori told ET from London.
There were no details available on whether these employees will be moved to other locations, or if there were outplacement services available. Mr Liguori added that the handset maker also has a sales & marketing office in New Delhi, which will continue to be operational.
Earlier, Sony Ericsson's India office issued a statement on the back of a number of news reports, which spoke about the Chennai operations shutting down.
"Sony Ericsson confirms that it is continuing its business transformation programme, as announced previously, and is making changes to its global organisation to reduce costs and increase efficiencies. The principal aim of the company is to return to profitability as soon as possible. As part of its programme that started a year ago, Sony Ericsson will phase out activities in some of its locations worldwide, and plans to reduce headcount globally by 2,000. Sony Ericsson intends to complete its programme by mid-2010," the statement read.
The company has already cut nearly 500 jobs since last year, as part of this restructuring.
Meanwhile, Som Mittal, president of Nasscom, said that Sony Ericsson's decision is not very significant, as the overall economy continues to show signs of recovery.
"Some part of this consolidation will happen all around. Some like Nokia are expanding their plant. By and large, people are increasing investment and jobs are coming back, also for laterals. So, these are not significant events," said Mr Mittal.
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