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 krona (£11.3bn) from October to December compared with 3.89bn krona 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. Sales for the last quarter of 2009 fell by 13 per cent to 58.3bn krona, with the company also hit by tough competition from China’s Huaw.
Other competition in emerging markets in Central America, Africa and Europe has also eaten into the company’s profits. A slowdown in customers signing up for newer high speed technology has also contributed to the decline. Ericsson saw its net profit fall 67 per cent to 3.7bn krona for the whole of 2009.
Ericsson president and chief executive Hans Vestberg said: “During the second half of 2009, network 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.