Ericsson to cut 5,000 jobs
With quarterly profits down 31 percent year over year, the wireless equipment maker is reducing its workforce by about 6 percent.
Wireless equipment maker Ericsson said Wednesday it will cut 5,000 jobs after witnessing a 31 percent drop in fourth-quarter net profit year over year.
The Swedish company said profit plummeted due to a dramatic drop in sales in its handset unit, Sony Ericsson, and restructuring charges. Overall, net profit fell to $465 million (3.9 billion kronor) from $672 million (5.6 billion kronor) in the same quarter a year ago. The job cuts represent about 6 percent of the company's 79,000 employees.
"It remains...difficult to more precisely predict to what extent consumer telecom spending will be affected and how operators will act," said Carl-Henric Svanberg, CEO of Ericsson. "To date, our infrastructure business is hardly impacted at all, but it would be unreasonable to think that this would be the case also throughout 2009."
Still, Ericsson's core equipment business, along with a weaker kronor, helped quarterly revenue increase 23 percent to $8 billion (67 billion kronor) from the same quarter a year ago. The revenue figures beat analyst expectations, sending shares of the equipment maker up more than 10 percent in early European trading.
For the year, profits fell 48 percent to $1.3 billion (11.3 billion kronor), while sales grew 11 percent to $25 billion (209 billion kronor).