Cost reduction has been necessitated by the recent repercussions felt in the European market after the economic slowdown in the US.
Kurt Hellstrom, chief executive, has written to employees warning that further job cuts are on the way. We have to focus much harder on our core business and eliminate activities and structures that might be appropriate in times of strong growth cycles but are simply unacceptable in times like we have now, he says.
Ericsson has already announced 3,300 job losses from manufacturing plants in Sweden and the UK. A further 3,500 will change employer as part of a handsets outsourcing deal with Flextronics, which is due to be finalised this week.
