Ericsson to slash 13,000 jobs
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STOCKHOLM, Sweden (CNN) -- Ericsson said on Tuesday it planned to cut about 13,000 jobs as the Swedish company posted its eighth straight quarterly loss.
Ericsson, the world's largest maker of mobile phone networks, made a net loss of 4.3 billion crowns ($520 million) in the first three months of this year, compared with a loss of 2.97 billion crowns in the first quarter of 2002.
"The macroeconomic environment has become more uncertain with weaker short-term demand, further actions are therefore needed," Chief Executive Carl-Henric Svanberg said.
Svanberg announced plans to cut the number of people it employed to 47,000 in 2004 from 61,000 at present. Ericsson had 64,600 employees at the end of last year and had said in February it was aiming to bring its workforce to below 60,000 by the year-end, down from the 107,000 employees at the start of 2001.
He also lowered the company's forecast for the mobile systems market as demand continued to weaken. Ericsson, like its rivals, has seen sales decline as telecom operators slash spending on wireless equipment in an effort to manage the balance sheets after spending heavily on expansion.
Many telecom operators have also delayed spending on high-speed networks, or 3G, because demand is unproven.
Ericsson now expects this year's mobile infrastructure sales to fall by more than the 10 percent it had previously forecast. Rivals Nokia (NOK) and Siemens (FSIE) have said they expect the market to decline by 15 percent or more.
Ericsson plans to cut its annual operating expenses to 47 billion crowns in the first quarter from 51 billion in the last three months of 2002. The company had earlier aimed to bring down its costs to 48 billion for the second quarter and 38 billion for the fourth quarter of 2003.
"The numbers were in line with expectations and there were no dramatic surprises. The spotlight is on the restructuring figures. I think these are necessary and good measures, there is no time to waste," Thomas Langer, analyst at WestLB Panmure, told Reuters.
Ericsson reported an adjusted pretax loss of 3.5 billion crowns, while sales plunged 30 percent to 25.9 billion crowns.
