Ericsson's new CEO Hans Vestberg

Ericsson Profits Down

Swedish telecoms operator Ericsson announced on Monday a dramatic fall in net profits for the fourth quarter of last year and said it was cutting another 1,500 jobs this year under its restructuring plan.

Ericsson said that its net profit fell by 92 percent between October and December 2009 and said the fall was due to the cost of a restructuring plan in which 6,500 jobs will be cut, 1,500 more than orginally planned when its cost-cutting plan was launched in January 2009.

The company said net profit in the October-December period was 43.4 million US dollars. In a change of policy, Ericsson said that it was expanding its savings programme from 10 billion kronor to 15-16 billion kronor (2.1-2.2 billion dollars.)

To meet its new target, job losses will increase from 5,000 to 6,500. In the run up to Christmas, Ericsson announced that it was closing its factory in Gävle with the loss of almost a thousand jobs.

Sales have been hit by the global recession and increased competition from China. Chief Executive Hans Vestberg said "During the second half of 2009, Networks' sales were impacted by reduced operator spending in a number of markets." 

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