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Ericsson Slashes 5,000 Jobs

Ericsson Slashes 5,000 Jobs

Swedish mobile technology developer Ericsson has announced its results for its fourth quarter of 2008, and while the company tries to put a bullish face on the results, it has also announced it is cutting 5,000 positions in an effort to cut costs and improve its bottom line. Ericsson blames poor global economic conditions for the layoffs, but especially a “dramatic drop” in revenue from its mobile phone joint venture Sony Ericsson.

Ericsson employes about 80,000 people worldwide; the 5,000 layoffs represent just over a 6 percent reduction in the company’s overall workforce. However, the company had added over 4,000 employees to the books during 2007 as it hired into its research and development divisions. However, the company also previously eliminated about 4,000 positions worldwide during 2008.

Approximately 1,000 of the layoffs will impact employees in the Stockholm area; the rest will hit Ericsson’s worldwide operations.

Ericsson saw its net profit drop by 47 percent compared to a year earlier; however, the company’s sales increased by 11 percent. Ericsson CEO Carl-Henric Svanberg says the company delivered a solid 2008, has a strong cash position, and expects the global economic downturn won’t impact the mobile industry as much as others, since mobile operators generally have plenty of cash on-hand, and still need the infrastructure and technology Ericsson supplies.

The same is not true for telecommunications gear maker Nortel, which recently filed for bankruptcy protection in the U.S. and Canada.

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