Top telecom equipment maker Ericsson has reported lower-than-expected profit and announced up to four thousand job cuts world wide after being hit hard by a slowdown in the sector.
The Swedish firm wants to cut costs by 420 million euros annually. Ericsson’s Chief Executive Carl-Henric Svanberg explained: “We are planning for a market with no growth and have to adjust our costs to that, it’s important to secure our leading position in the world. We are going to cut our staff in Sweden by one thousand employees, but not in research and development where we’ve built our technical excellence.’‘
Ericsson first announced a collapse in earning in mid-October when it said the operators of mobile phone networks in Europe and North America were spending less. Its fourth quarter operating profit was 807 million euros.
Since last autumn, Ericsson’s shares have lost nearly half their value and they slipped further after this announcement especially when the chief executive declined to talk directly about the company’s first-quarter outlook.
Investors are worries about the company’s ability to build market share. It currently has just over 41%, but its rival Nokia Siemens Networks has been making gains, capturing 35.5% as of the third quarter.