Ericsson, Ericsson to cut 20,000 jobs

Manufacturing News, Source : TheManufacturer.com
Published : 22 Apr 2002 9:48

Ericsson is cutting 20,000 jobs after announcing worse than expected first-quarter losses.

10,000 jobs will go this year, with a further 10,000 being cut in 2003. 2,000 staff have already lost their posts.

Ericsson made a first quarter pre-tax loss of 5.4 billion Swedish kronor (£363 million) and said it doesn't expect to return to profit until next year. It expects the mobile phone systems market to fall by more than 10 per cent this year, below a previous forecast of flat to down 10 per cent.

President Kurt Hellstroem commented: "As expected, this past quarter was very challenging. Many operators have recently lowered investment plans further. As sales will be lower than anticipated, with ongoing aggressive costcutting, we plan to return to profit at some point in 2003."

Ericsson plans to make 10 billion skr in cost cuts in 2002 and a further 10 billion in 2003. It expects 8.5 billion skr in restructuring costs in 2002 and 2 billion in 2003. Coupled with previously-announced restructuring programmes, Ericsson expects savings of 28 billion skr this year, 38 billion next year and 40 billion from 2004.

Ericsson said it expects global handset sales to be between 400 and 420 million units this year, the same as the level estimated by Nokia last week.

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