Mobile phone manufacturer L.M. Ericsson Telephone Co. is in talks with Japanese electronics group Sony Corp. over a joint mobile phone venture.

Ericsson confirmed it is in negotiations but was not prepared to comment further.

If the deal is a success it could mark the beginning of a series of joint ventures between handset manufacturers in a bid to remain profitable in an increasingly turbulent market place.

Rumours of negotiations between Mitsubishi and Motorola have also been floating around but neither company was willing to comment.

Sony may just be the Swede’s saviour after Ericsson announced late this week it would be cutting as many as 12,000 jobs after disappointing first quarter results reveled a 90 percent drop in sales on the same period last year.

Job cuts at Ericsson seem to be inflating all by themselves, as the bidding started at just over 2,000 only a couple of months ago.

Ericsson is currently in the process of outsourcing the production of its handsets to Singapore-based Flextronics.