Sony could be cutting back on its smartphone business, laying off 2,000 workers

This year's Sony Xperia 1 at MWC 2019

Sony's smartphone efforts have never been tremendously successful, and even though things have only been getting harder for the company, it hasn't stopped throwing money into the business. Last year, it launched the XZ2 and XZ3 flagship phones within a few months, perhaps as an attempt to get some more attention to its devices.

Now, however, Sony may be ready to accept that it can't compete with rivals such as Samsung or Huawei, according to a report from Nikkei. Sony won't be dropping out of the smartphone business completely, but it would cut back on its workforce by as much as 50%, leaving it with just 2,000 employees. Some of the workers could be directed to other division's of the company, but it would be a significant shakeup nonetheless.

Sony was never a leader in smartphone sales, but it has gone from a 3% market share in 2010 to less than 1% today, as competition has grown incredibly fierce among the biggest players. The smartphone market has mostly been saturated with offerings from the likes of Samsung, Huawei, and Apple, and the impending race to 5G leaves the company in an even more difficult situation where it would be very hard to compete on even terms.

The cuts would see Sony focus on selling its devices in Europe and East Asia, limiting sales in other areas to reduce costs. The company has been getting rid of "toxic" assets, be it by selling off its VAIO division back in 2014, or a recent restructure in its TV business. While the report remains unconfirmed, it wouldn't be surprising for the company to take a similar step with its smartphones.

Source: Nikkei

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