Ericsson Reports Profit Drop, to Cut 5,000 Jobs Jan 21, 2009

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LM Ericsson reported profits dropped 31% in the fourth quarter, citing restructuring charges and weaker handset sales, and said it would cut 5000 jobs, or more than 6% of its global workforce. Net profit in the quarter fell to 3.9 billion kronor (approx. US$465 million). Full-year profits fell 48%, while sales grew 11%.

Chief Executive Carl-Henric Svanberg said the economic recession spreading around the world had not yet hit the network industry. Telecom operators, who build their networks with equipment from Ericsson and its competitors, still have healthy finances, he said.

"It remains, however, difficult to more precisely predict to what extent consumer telecom spending will be affected and how operators will act," Svanberg added. "To date, our infrastructure business is hardly impacted at all, but it would be unreasonable to think that this would be the case also throughout 2009."

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