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Ericsson makes another 5,000 redundant despite solid quarter

Antony Savvas

Ericsson is making another 5,000 staff redundant as part of a $1.2bn cost reduction programme, despite reporting better than expected fourth quarter results.

The Swedish firm said sales had risen 23% and earnings per share were ahead of expectations.

 

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However, the firm said a further 5,000 jobs would be going across the group worldwide, with about 1,000 going in Stockholm. The move extends a cost-cutting programme started last year - Ericsson cut 4,000 jobs - although the company has been shedding staff for years.

Once Ericsson lost its number two position in the mobile phone market behind Nokia some years ago, thousands of jobs were shed across both its mobile phone manufacturing business and its network equipment operations.

"We have had a solid performance in 2008," said Carl-Henric Svanberg, Ericsson's chief executive. "Professional services have continued to show strong growth. Operating margins, excluding Sony Ericsson, have steadily improved, and our financial position is strong with net cash of SKr35bn," he said.

But Svanberg said the situation was expected to deteriorate in 2009 as the global recession took hold.

The company will now axe consultants and other temporary staff, consolidate R&D sites and make other layoffs.


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