Ericsson's profits drop, firm will cut 5,000 jobs

Ericsson posted a 31 percent drop in net profit for the fourth quarter of 2008, and despite better-than-expected sales numbers the manufacturer said it would lay off 5,000 workers to cut costs. In addition, the company said that the 2009 outlook was uncertain.

The Swedish equipment maker posted a net profit of $469 million for the quarter, down from $680 million in the year-ago period. Sales in the quarter rose 23 percent to $8.07 billion, up from $6.51 billion in the fourth quarter of 2007. The company's operating margin fell to 13.7 percent, down from 14 percent. The largest telecommunications equipment maker in the world also said that it had received a less substantial contribution from Sony Ericsson, the joint venture run by Ericsson and Japan's Sony.

Ericsson said it would cut 5,000 jobs from its total workforce of 78,000, including 1,000 jobs based in Sweden. The company said it expects its infrastructure business to be impacted in 2009 and that it expects the mobile infrastructure market to be "flattish" for the year.

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