Ericsson blames joint venture for profits slide

Ericsson blames joint venture for profits slide

 

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.

 

Written by Mobile Today
Mobile Today

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