More jobs to go as Ericsson losses continue

Ericsson [Stockholm: ERICbc1], the world’s largest supplier of mobile telephone networks, has reported further losses and lowered its sales outlook in its first quarter report, but is still confident of a return to profit this year. The Swedish company reported its tenth consecutive quarterly loss, amounting to SEK4.3 billion, as sales fell by 30% to SEK25.9 billion and orders dropped 35% to SEK27.1 billion. The results prompted Ericsson to adjust its forecast for the industry sales of wireless networks, which account for two-thirds of its revenues, saying that annual turnover in the sector will now fall by more than 10%. The company, which has more than a quarter share of the global wireless network market, has said that it will intensify its cost cutting measures and increase the planned number of redundancies to as many as 14,000. At its peak in 2001 Ericsson employed around 107,000, but this was down to 61,000 by the end of March this year. The company had originally planned to reduce this to 54,000 by the end of 2003, though this figure is now expected to drop as low as 47,000. However, the floundering vendor insists it will retain its status as market leader and remains determined to return to profit during the year.