Ericsson reports billion quarterly loss

0:40 min

Crisis-hit corporation Ericsson is losing vast sums of money, and has sharply cut how much its paying to investors.

The latest quarterly report shows turnover down by 11 per cent, and the net result is minus a billion kronor. The dividend paid to shareholders has been cut from SEK 3.70 to SEK 1 per share.

The new CEO says the problem is that Ericsson’s customers are not spending as much.

“It is a serious market situation. Customers have gradually decreased their investments, and we have seen during the year that this has affected us negatively,” says Börje Ekholm to Swedish Radio.

Ericsson stopped making mobiles with Sony in 2012, and gets most of its money from companies and governments spending on telecoms infrastructure and maintenance.

”It is serious. I cannot say otherwise,” says Börje Ekholm.

Ericsson is already working on thousands of lay-offs, and the CEO says he will focus on profitability above all, which could mean further job cuts, since payroll is typically the biggest part of any company’s costs.