Feeds

Ericsson sacks 12,000 after revenue slump

But Sony still likes it

  • alert
  • submit to reddit

Top three mobile application threats

Ericsson has announced it will lay-off 12,000 staff in a bid top return to profitability after it announced disastrous results today.

The mobile manufacturer saw its shares fall 13 per cent when it announced a Q1 loss of SKr4.9 billion (Swedish krona = £338 million). This was actually just slightly better than expectations of a SKr5 billion loss, but the company also said it doubted whether things would improve in the second quarter.

It is also a far cry from the SKr6.1 billion (£421 million) profit it made this quarter last year.

It's all down to heavy losses in the company's handset business and a heavy slowdown in the infrastructure market. Operating margins have fallen from 11 per cent to minus 8 per cent. The company said it wasn't likely to reach its 10 per cent margin level this year.

And so, with depressing regularity, we see another slew of jobs go in the IT market. The 12,000 announced today (half from Sweden, half from outside) will see its number of consultants halved. And this is on top of the 3,300 it already announced from its manufacturing plants.

It's not all bad news though: Ericsson plans to merge its handset operations with Sony. Ericsson president and chief exec Kurt Hellstroem has refused to comment at the moment, but it's a virtual certainty that the two will link up to develop and sell mobiles - a good move for both of them.

Such an alliance would put them just behind Motorola in terms of market share (although both are eclipsed by Nokia). It would let Sony's entertainment technology into the market on Sony's terms and give Ericsson a helping hand while possibly giving its phones an edge.

Sony has already developed mobiles that use memory cards for storing music and is working with Sun's Java to produce next generation games on a phone. ®

Related Stories

More job cuts expected at Ericsson
Nokia and Ericsson to axe staff

3 Big data security analytics techniques

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.