Ericsson to Cut 5,000 Jobs

by Jordan Yerman | January 21, 2009 at 12:25 pm

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Swedish telecom giant Ericsson will cut 5,000 jobs in early 2009, on top of the 4,000 it cut in late 2008.

The end of the year saw Ericsson's profit fall by nearly a third, partly due to poorer performance from its mobile-phone handset arm, Sony-Ericsson (how most of us know of the company in the first place).

What's strange is that Ericsson's overall revenue rose, but it ended up spending extra money on its own restructuring.

Ericsson (ERICY) also unveiled plans to deepen its restructuring and eliminate about 5,000 additional jobs as it prepares to cope with a sharp fall in demand for telecoms equipment. The measures will cost 6 billion to 7 billion kronor and lead to annual savings of 10 billion kronor by the second half of 2010.

The group last year committed to cutting 4,000 job cuts to save 4 billion kronor a year.

Ericsson said its core business had so far hardly been affected by the global economic slowdown.

"But it would be unreasonable to think that this would be the case also throughout 2009," said chief executive Carl-Henric Svanberg.

Just over eight years ago, I was a temp for Ericsson's NYC-based Global Mobility division, back when Ericsson made its own handsets and the idea of replacing desktop computers with laptops was a daring move. That office had some really smart folks- I hope it isn't axed.