Ericsson profits dive by 92 per cent

PROFITS at Swedish telecoms giant Ericsson plunged 92 per cent in the fourth quarter triggering a cull of 1,500 staff.

The company has been hit by an ongoing dip in orders and the costs of its restructuring.

Its net profit was 314m kronas (£11.3bn) from October to December compared with 3.89bn kronas during the same period the year before.

Ericsson has already shed 5,000 jobs as it battles against the downturn in global spending on telecommunications equipment.

Sales for the last quarter of 2009 fell by 13 per cent to 58.3bn kronas, with the company also hit by tough competition from China's Huaw.

Hans Vestberg Ericsson President and chief executive Hans Vestberg said: "During the second half of 2009, Networks’ sales were impacted by reduced operator spending in a number of markets.

"Group sales for the full year were less affected and the operating margin increased slightly."

Vestberg said that its joint ventures, including Sony Ericsson, which posted losses last week, were on track to return to profit.

"We maintained market shares well in all segments, cashflow was good and our financial position is strong."

Ericsson announced in November that it was closing its Ansty Park R&D site in Coventry – with 700 jobs moving overseas.