Swedish telecom giant Ericsson has announced plans to cut 5,000 jobs from its global workforce. The job losses are part of the company's overall cost reduction programme which will also include cutting the number of consultants and other temporary staff and consolidation of R&D sites. The move will cut Ericsson's annual operating costs by US$1.2 billion by the middle of 2010. Ericsson had 78,750 employees worldwide at the end of December 2008.
Figures for the fourth quarter of 2008 were stronger than expected although net income fell. Ericsson reported revenues of SEK67 billion (US$8 billion) up 23 per cent on the previous year with income down 31 per cent on the year at SEK3.9 billion (US$467 million). Ericsson's shares rose by 12.5 per cent on the Swedish stock exchange following the news. For the full year 2008, Ericsson reported revenues of SEK208.9 billion (US$25 billion), up 11 per cent compared with 2007, and net income of SEK11.3 billion (US$1.35 billion), down 48 percent from 2007.
Alluding to the impact of the global economic downturn, Ericsson president and CEO Carl-Henric Svanberg said the effects on the global mobile network market should not be significant as most operators had healthy financial positions. The company's infrastructure business had hardly been impacted at all but Svanberg warned that it would be unreasonable to think this would be the case also throughout 2009.
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