View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
December 21, 2012

Ericsson demands $1.2bn charge to write down ST-Ericsson stake

Ericsson said it would charge SEK8bn to offset the reduction of SEK8bn of its earnings Q4 2012.

By CBR Staff Writer

Ericsson is demanding a $1.2bn charge to write off its exposure to ST-Ericsson, a venture that produces cellphone components.

Established in February 2009 with STMicroelectronics, ST-Ericsson has generated $2.7bn in losses since its launch, and recently revealed its intention to exit the venture as part of its strategic plans to cut costs.

The new plan is aimed at increasing the firm’s operating margin to around 10%. The firm is reducing operating expenses to $600m from $650m per quarter from 2014.

Ericsson has been battling against a slowdown in sales at its core network unit due to increasing competition and an uncertain global economy.

The firm’s successive cost-cutting plans, which included slashing 1,700 jobs in Apriland the transferring some of its product development duties to STMicro, were unsuccessful in stopping losses.

The Swedish telecoms manufacturer had exited from the handset market in February, following the sale of its 50% stake in Sony Ericsson to Sony.

Content from our partners
Unlocking growth through hybrid cloud: 5 key takeaways
How businesses can safeguard themselves on the cyber frontline
How hackers’ tactics are evolving in an increasingly complex landscape

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.