Ericsson Announces Plans to Axe 5,000 Jobs

January 22, 2009 at 13:17 Leave a comment

Ericsson has reported that its net income for the fourth quarter fell by 31% due to restructuring costs and lower profit margins – and announced plans for a further 5,000 job cuts. Net income in the three months to Dec. 31 was SEK3.89 billion (US$460.8 million), down from SEK5.64 billion (US$671 million) in the year-earlier period. Sales in the quarter increased by 23% year-over-year and by 11% for the full year.In the quarter, gross margin was 35.2%, excluding restructuring charges. Full year gross margin amounted to 36.8%, compared to 39.3% a year ago. The sequential decline was mainly due to a high proportion of network rollout services. The network rollout sales increased sequentially by 61%.

We have had a solid performance in 2008,” said Carl-Henric Svanberg, President and CEO of Ericsson. “Sales grew by 11% with good demand for our entire portfolio and across the world. Changes in currency rates had very small effect on full year growth. 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 SEK 35 b. Sony Ericsson is affected by the economic downturn and the declining demand in the consumer market and has taken necessary actions.

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Entry filed under: Ericsson, Europe, Financial, Job Cuts, Mobile, Sweden, Telecom, Wireless. Tags: , , , , , .

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