Ericsson has blamed its mobile handset venture, Sony
Ericsson, for a dramatic drop in fourth quarter profits.
The Swedish telecoms equipment maker’s fourth quarter
net profit fell 31% to 3.89bn Swedish crowns (£0.5bn). It now plans to slash
5,000 jobs – about 6% of its 79,000 employees – in an attempt to cut costs.
Ericsson said its core business had not been affected
by economic conditions, but chief executive, Carl-Henric Svanberg said it would
be ‘unreasonable’ to think this would be the case throughout 2009.
Last week, Sony Ericsson announced results worse than
many analysts had expected, when it posted a £6.9m loss in 2009. It also laid
out plans to save an extra £180m in addition to the £300m it announced in its
restructure last year. It is not yet known how many job cuts will be made at
the manufacturer as a result of the cost cutting.
Ericsson holds a 50% stake in Sony Ericsson due to its
joint venture with Sony.