Sony Mobile China is caught in a layoff storm: business is not good and employees are anxious

The rapid rise of Chinese mobile phone manufacturers has suddenly made the good days of many foreign mobile phones gone forever.

Following the decline in sales of mobile phone giant Samsung in China, Japanese manufacturer Sony Mobile has also been caught up in a storm in China recently. While Sony Mobile is cutting product plans, rumors of further layoffs have caused Chinese employees to worry about their future.

The latest news is that about four-fifths of Sony Mobile's global layoff plan is aimed at China, and Sony China's official term is "quite a large part". With the reduction of regular employees, Sony Mobile will stop developing specific mobile phone models for the Chinese market, which means that Sony will provide the same products to the three major telecom operators in China in the future.

Starting at 10 a.m. on November 4, hundreds of employees gathered downstairs of Sony's mobile R&D center in Beijing, demanding that the company publish a list of layoffs, negotiate on an equal footing, and provide "reasonable" severance pay.

Protest site

A Sony Mobile engineer at the scene said that these requests were made because some employees had signed an "NDA" (non-disclosure agreement) with Sony officials, while other affected employees believed that this non-disclosure agreement was unfair.

At present, Sony's official layoff plan has not been finalized, and specific details such as compensation have not been announced. It still needs to be negotiated with the union and approved by government departments. In an email reply to Tencent Technology, Sony China stated that the layoffs were based on the business reforms formulated after the company's second quarter financial report for fiscal year 2014 was released, and Sony Mobile Global CEO Kunimasa Suzuki also had face-to-face communication with Sony Mobile employees in Beijing.

On October 31, Sony released its second quarter results, showing that it suffered a huge loss of $1.2 billion due to the poor performance of its mobile business. Faced with competitive pressure from cheap Chinese smartphone manufacturers, Sony CEO Kazuo Hirai also said that the company's smartphone strategy had not worked.

The reporter learned from several Sony Mobile China employees that the R&D and sales departments will be the hardest hit by the layoffs. The main reason is that Sony Mobile will cut its R&D product spending in China. A Sony employee in the product testing department said that the testing of Sony's mainstream products has been stopped and most of the projects on hand have entered the final stage.

In fact, Sony has stopped selling some of its products in the Chinese market. Industry insiders have confirmed that Sony's new smartphones Xperia Z3 Compact and E3, which were launched in Berlin, Germany in September, will not be available in China. The industry insider said the reason is related to the fierce competition in the Chinese market for products in this price segment.

At 2:30 pm on November 4, Sony Mobile held a communication meeting between management, union representatives and employees. A Sony employee said that the head of human resources was present at the meeting, and the union representative explained the layoff plan.

The current compensation plan is based on the "N+2+2" principle (note: N months' salary + 2 times Beijing's average salary + 2 times Sony's salary, where N is the number of years of service), but employees are not very satisfied and a new plan is still under discussion. Sony officials did not respond to Tencent Technology's inquiries.

Another Sony Mobile staff member told Tencent Technology that the employees' protests may continue.

Sony's mobile business is in trouble

Due to the impact of fierce market competition, especially in emerging markets, Sony Mobile can only consider major adjustments to its business structure until a better solution is found.

In the second quarter of this year, Sony Group's revenue increased by 7.2%, but it suffered a loss of 1.2 billion US dollars, which was dragged down by the poor performance of its mobile business. The operating loss of this part of the business was as high as 1.6 billion US dollars, eliminating the revenue growth brought by the best-selling products such as PS4. At the same time, Sony announced that it would lower its smartphone sales forecast from 43 million units to 41 million units. This is the second time the company has lowered its smartphone sales forecast after July. The target set by Sony at the beginning of the year was 50 million units.

In this regard, some analysts said that Sony's business adjustments were related to the impact it had received from Chinese smartphone manufacturers in the market, which are rising and gaining more market share.

Statistics from third-party research firm Strategy Analytics show that Chinese manufacturers now account for 38% of the global smartphone market, exceeding the combined market share of Samsung Electronics and Apple . In fact, even Samsung has begun to be affected by this situation. Samsung's third-quarter financial report released at the end of October showed that its net profit fell 49% year-on-year.

According to data released this year by two major statistical agencies, IDC and Gartner, Sony has not yet entered the top five in the global smartphone market.

Deteriorating industrial environment causes employees to worry

The main demands of Sony Mobile employees are to announce the layoff list as soon as possible and to provide an opportunity to communicate with the department responsible for layoffs so as to obtain the compensation plan they want.

The backlash from Sony Mobile China employees reflects their concerns about their job prospects. A Sony Mobile employee told Tencent Technology that compared to previous years, foreign companies have been laying off employees more frequently this year, and most of the laid-off employees are in the R&D department. In a short period of time, it is difficult for the market to absorb the huge number of similar technical talents.

In July this year, Microsoft announced that it would lay off 18,000 employees. Microsoft China, which has taken over Nokia 's Beijing department, became the hardest hit area for layoffs because its R&D mainly revolves around feature phones. Recently, there was news that the Xbox game console R&D department of Microsoft Asia Hardware Center located in Nanshan Science and Technology Park in Shenzhen, Guangdong Province was also suddenly fired.

On September 24, software manufacturer Adobe announced the closure of its R&D branch in China, with layoffs of about 400 people including developers, testers, designers and sales staff. Earlier, multinational companies such as IBM , Motorola and Dell have all had large layoff plans in China in recent years.

The Chinese department did not participate in the core research and development

Although Sony has not officially announced the layoff ratio in each department, a Sony employee told Tencent Technology that the hardware R&D department may become "cannon fodder."

The employee said that previously, Sony's R&D department in China mainly focused on adjusting each generation of its products for different standards of China's three major telecom operators. However, as the government stopped developing specific mobile phone models for the Chinese market, the department's existence has little value.

The Sony Mobile employee said that the company is mainly divided into regular employees and outsourced employees. The work content of regular employees and outsourced employees is almost the same, but the salary of the latter is only half of that of regular employees. This view has not yet been confirmed by Sony officials.

There was once news that Sony Mobile would withdraw from the Chinese market. This large-scale layoff plan has intensified this rumor, but Sony China officials have denied this statement.

The relevant person in charge of Sony China said that China is still one of Sony's three largest markets in the world. Sony is constantly strengthening its operations in China in all business links to ensure and enhance China's strategic position as an important growth and profit contribution market. In addition, the strategic adjustment of the mobile business will not affect Sony Group's strategic positioning in the Chinese market.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.