Ericsson ups jobs cull to 6,500
Profits plunge, competition rises
Ericsson will be laying off another 1500 people following a quarter that saw net income down to less than a fifth of last year's.
In the last three months of 2009 Ericsson's net income was 725m Swedish kronor (£62.5m), on sales of 58bn kroner, compared to the 4bn kroner the company brought in during the same period of 2008, on sales of 67bn kroner.
The figures prompted the company to announce it will be laying off a total of 6,500 people as part of its program of cost-saving - up from the 5,000 announced in January last year.
The drop in revenue can, in part, be attributed to network operators holding back on investments during the financial squeeze. But competition from Huawei is also significant - Huawei has been winning a lot of infrastructure deployments around Europe and the world, putting pressure on the small club of existing suppliers.
On Friday the company's joint venture with Sony announced things were equally bleak in the handset world, where sales for the tail of 2009 were more than 40 per cent down on 2009, with the average price per handset falling by a Euro to €120.
Ericsson has spent the last 12 months cutting costs, and the company reckons it's on track to achieve around 15bn kroner in annual savings, though it's going to have to spend another 14bn kroner to get there.
Pressure from America, in the form of Apple and Google, is eating away at the more profitable end of the handset market; while pressure from China, in the form of Huawei, is snatching infrastructure deployments that should be funding the company's recovery. None of this is good news while the still-unstable economy makes every penny harder to pick up. ®
to any customers of Ericsson who are used to having good quality locally-sourced technical support. You'll soon find yourselves being supported by untrained labour in third-world countries. Well at least the likes of Virgin Media and 3 will find out what it's like dealing with their own call centres.
You're just bitter. Race to the bottom, gotta love it. Won't backfire. Ever. Or else, look forward to your kids having mandatory training in 3rd-world-languages so they can have a bright future in a callcenter, catering to the needs of the former 3rd-worlders we sold all our industries to.
Used to good quality local support??!!
Yeah, right. Ericsson has gone downhill so far, so fast in the last 3 years. Huawei and ZTE are going to kill them. Ericsson used to be the king of the GSM/UMTS hill. No more. Products and UK support are both crap.