Wireless equipment maker LM Ericsson AB reported a sharp drop in fourth-quarter net profits and said it would lay off around 1000 employees in Sweden because of costs cuts. Ericsson's CEO Carl-Henric Svanberg said job-cuts would also be planned worldwide to reach its annual cost cut goal of US$629 million.
One-time costs are expected to reach around 4 billion kronor ($629 million). The full effect of the move is expected in 2009, it said, and most of the layoffs in Sweden would be made through voluntary programs.
Operating margin for the quarter fell to 14 percent, from a previous 22.5% in the same three months in 2006. Fourth-quarter net profit fell 42% to 5.6 billion kronor ($880 billion), down sharply from 9.73 billion kronor in the year-ago period. For the full year 2007, net profit dropped around 16% to 22.1 billion kronor ($3.5 billion), compared with 26.25 billion in 2006. Sales for the three-month period ended Dec. 31 remained almost unchanged at 54.5 billion kronor ($8.57 billion) from 54.2 billion kronor in the same period the year before. (AP)