Sony Ericsson profits plummet 98 per cent

Sony Ericsson is looking at staffing cuts after the company incurred a disastrous financial quarter.

The mobile handset maker saw its income over the quarter drop by some 98 percent, from €327 million to €8 million. Operating income fell by some 101 percent, while gross profit was down 29 percent.

The company blamed the rough quarter on a shrinking market and increased competition in the high-end handset sector along with an unfavorable exchange rate. The company estimated its market share over the quarter at roughly 8 percent.

As a result, the company is reportedly planning to cut some 2,000 jobs in an effort to save some €300 million over the next year.

"We are aligning our operations and resources worldwide to meet an increasingly competitive business environment and to help restore our capability for profitable growth," said Sony Ericsson president Dick Komiyama

"The measures we are taking are aimed at becoming a faster, more agile and more cost efficient organisation that can continue to create innovative products that excite consumers.”

The company's outlook for the next quarter is equally bleak. The firm expects the 'challenging market conditions' it faces to continue at least through the calendar year.