Ericsson Chief Executive Noted That Political Unrest in Thailand Caused Investment in 2007 to Slow Down

Swedish telecommunications equipment maker Ericsson said on Febuary 1, 2008 that 4,000 jobs worldwide would be cut as the company reported flat sales for fourth quarter 2007 and a 37-per-cent drop in pre-tax income. Chief executive Carl-Henric Svanberg also noted that political unrest in emerging markets like Thailand, Bangladesh and Pakistan had halted investments in fourth quarter 2007.
Fourth-quarter sales totalled 54.5 billion kronor (8.56 billion dollars), the same as in the corresponding business quarter 2006.Pre-tax income was 7.6 billion kronor, down from 12.2 billion kronor in fourth quarter 2006.
Ericsson expected sales in 2008 to remain flat, chief executive Carl-Henric Svanberg told analysts and reporters, adding that “market conditions” were “tougher” for its mainstay network operations.
In 2007, “they started in single digits, but ended flattish,” he said, saying the job cuts were necessary to “adjust for a slower market.”
Of the 4,000 job cuts, some 1,000 would impact Sweden, “as far as possible through voluntary reductions,” Svanberg said, adding that the group aimed to avoid cuts in research and development. Worldwide the group has 74,000 employees, including some 19,000 in Sweden. Management planned cost savings of 4 billion kronor due to take full effect in 2009.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *