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The news comes soon after the world's biggest mobile phone maker, Nokia, reported a 90 per cent drop in profits.
President of Sony Ericsson Dick Komiyama said it has been expected that the first three months of 2009 would be particularly challenging.
"We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible," he commented.
Sony Ericsson also predicted that the worldwide market for handsets will contract by at least ten per cent this year.
In related news, the Trades Union Congress has called on the government to help stop rising unemployment following a report which showed that 100,000 manufacturing jobs have been lost in the north of England since May 2008.
