Sony Ericsson to axe 2,000 jobs

Mobile phone maker Sony Ericsson has said it will shed 2,000 jobs worldwide over the coming year to cut costs.

The news came as Sony Ericsson reported an operating loss of 2m euros ($3.1m; £1.59m) for the second quarter, against a profit of 315m euros a year ago.

Sony Ericsson said it was aiming to cut operating costs by £300m a year.

In June, the company had warned its profits would be less than previously forecast as demand for expensive handsets waned.

Sales in the quarter fell by 9.4% to 2.82 bn euros.

A company spokesman said a review of all operations, including those in the UK, would be taken before any decisions were made about where jobs would be cut.

Spending squeeze

The company is a joint venture between electronics firm Sony and telecoms equipment maker Ericsson.

Consumer demand has been hurt by a credit crunch that has prompted banks to withdraw many loans and mortgages.

As a result, many consumers have had less money to spend and have had to cut back on their outgoings.

The slowdown in many of the world's largest economies such as the US, UK and Japan has hit both consumer and corporate spending.

'More agile'

Sony Ericsson has been trying to do more business in emerging markets, as European trade reaches near-saturation levels.

That has meant the sale of more low-end, less costly, phones.

"Our target is to achieve a reduction in operating expenses of 300m euros annually, with the full effect expected to appear within a year," Sony Ericsson chief executive Dick Komiyama said.

"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."

Plane maker invests £500m in NI

Bombardier Aerospace is investing half a billion pounds in Northern Ireland, which will sustain over 800 jobs.

A total of £519.4m will be used to design and manufacture wings for their 110 to 130 seat C-Series aircraft at the Shorts factory in east Belfast.

It is the largest single investment in Northern Ireland by any company.

Northern Ireland First Minister Peter Robinson said: "I don't believe this would have happened if it hadn't been for devolution."

He added: "I just know, without giving away too many of the commercial issues involved, that this simply would not have happened if there had not been devolved institutions in Northern Ireland."

Mr Robinson said he and Deputy First Minister Martin McGuinness had been working on the deal "almost on a daily basis for these past months".

The government has also agreed to provide £52m to the project at Bombardier's east Belfast plant as part of a wider £155m government investment package in the Canadian firm.

Mr McGuinness said: "The investment will also see the development of state of the art technology as well as developing the manufacturing and engineering skills of our workforce that will benefit our economy for years to come."

Economy Minister Arlene Foster said: "Undoubtedly, the expertise in advanced design and innovative composite materials which Bombardier has developed in Belfast has been instrumental to today's decision."

Northern Ireland Secretary Shaun Woodward said the decision was proof that "devolution is winning for Northern Ireland".

Announcing the investment on the eve of the Farnborough air show, Bombardier said greener fuel-efficient technology used in the C-Series would "revolutionise" the 100 to 149 seater market.

The long-running project was dropped two years ago, but the Canadian aerospace firm resurrected it last year amid amid rising fuel costs globally.

Lufthansa has provisionally ordered 30 planes with an option for 30 more.

Siemens plans to cut 16,750 jobs

Siemens plans to cut 16,750 jobs worldwide as the German conglomerate streamlines its operations to weather the economic downturn.

The company employs around 400,000 staff worldwide. The cuts amount to about 4% of the workforce.

Siemens issued a profit warning in March and its shares have fallen almost 35% since the beginning of the year.

The firm plans to eliminate 5,250 jobs in Germany, where around 136,000 of its workforce is located.

The Munich-based engineering group said the cuts will include 12,600 mostly administrative jobs.

"Against the backdrop of a slowing economy, we have to become more efficient," said Peter Loescher, president and chief executive.

The job cuts are part of a scheme to reduce costs by 1.2bn euros ($1.9bn; £0.95bn) by 2010.

Siemens said it would only make forced dismissals as a last resort and would offer staff early retirement.

The company has also been grappling with an alleged corruption scandal that involved accepting bribes to win overseas contracts.

US loses 62,000 jobs during June

US firms cut workers for a sixth month in June, official figures show, stoking fears that the world's largest economy was heading towards a recession.

The economy lost 62,000 non-farm payrolls in June, the Labor Department said. It follows a newly revised figure of 62,000 jobs also lost in May.

Despite the reduction in payrolls, the unemployment rate was steady at 5.5%.

US companies have been reluctant to add staff amid higher oil and food prices, and slowing economic growth.

Gary Thayer of Wachovia Securities said that the payroll figures showed that the labour market was still very soft.

"We're not seeing dramatic job cuts, but clearly companies are trying to hold the line on costs," he said.

"It suggests that it's still a rough economy."

The US economy has shed jobs at an average rate of 73,000 a month, marking a total of 438,000 job losses so far this year.

Some economists are already predicting the unemployment rate will climb to 6% or higher in early 2009.

'Hard landing'

The majority of job losses in June came in the construction, financial services and manufacturing areas though retailers also shaved staff numbers.

These losses overshadowed the gains seen by the health service, education and leisure and hospitality and government sectors.

Consumer spending accounts for two-thirds of US economic activity and companies are worried that consumers are continuing to tighten their belts amid spiralling food costs and fuel costs.

On Thursday, the price of oil powered to a new record, hitting a fresh peak of $146.34 a barrel.

Many analysts are predicting that these factors will continue to dampen consumer demand and have a negative impact corporate profits.

At the same time, there is growing evidence that US firms are seeing a decline in demand for their services and goods.

On Wednesday, figures showed that factory orders climbed by the smallest amount for three months during May.

According to the Commerce Department, factory orders rose 0.6% in May, less than half the increase seen in April and March.

Without the support of transportation orders, which rose 2.5% on the back of rising orders for aircraft, the fall in orders would have been more dramatic. Excluding transportation orders, factory orders rose by 0.4%.

"The economy is at risk of a hard landing," said Brian Bethune of Global Insight.