Ericsson to cut 5,000 jobs worldwide

22 Jan 200938 Views

Swedish communications giant Ericsson is to cut 5,000 of its 80,000 workers worldwide, as profits fell to US$465m in its fourth quarter results.

The company’s CEO, Carl-Henric Svanberg, said that despite sales rising 11pc across the company’s entire global portfolio, and the company being in a strong financial position, the global economic situation has severely hurt its Sony Ericsson mobile division.

“Sony Ericsson is affected by the economic downturn plus the declining demand in the consumer market, and has taken necessary action,” Svanberg said.

It is understood that 1,000 of the 5,000 job cuts will occur in Ericsson’s home market Sweden, mainly in Stockholm.

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“The economic recession is spreading across the world,” Svanberg said. “The effects on the global mobile network market should not be that significant, as most operators have healthy financial positions. There is a strong traffic growth and the networks are fairly loaded.

“It remains, however, difficult to more precisely predict to what extent consumer telecom spending will be affected and how operators will act. 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.

It is not yet clear the impact the job cuts will have in Ireland where Ericsson employs around 600 people in Dublin and Athlone.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years

editorial@siliconrepublic.com