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Ericsson to axe 6,000--FT
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April 17, 2001: 6:01 a.m. ET
World's No. 1 telecoms network maker reportedly to slash more from workforce
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LONDON (CNN) - Ericsson, the world's No. 1 telecom networks equipment maker, is expected to cut 6,000 more jobs this week, a report said on Tuesday.
A slowing market in the telecoms industry has forced the Swedish company to seek cost savings and the cuts will be presented alongside its first-quarter results on Friday, the Financial Times reported.
Such a move would bring Ericsson's workforce down by around 15,000 this year to 90,000 after taking account of previously announced job cuts and outsourcing plans, the report said.
"We cannot comment on the report as we are now in the silent period ahead of releasing our earnings on Friday," Ericsson spokeswoman Ulrika Nasholm told CNN.
Telecoms equipment makers and technology companies on both sides of the Atlantic have been slashing jobs in recent months in reaction to the U.S. economic slowdown.
Cisco Systems (CSCO: Research, Estimates), the world leader in networking for the Internet, issued a profits warning after the U.S. markets closed on Monday and said it plans to lay off some 8,000 people, more than it previously said last month.
Motorola (MOT: Research, Estimates), the world's second-largest mobile phone maker, last week said it was expecting a wider second-quarter loss than in the first quarter. It has announced plans to cut about 22,000 jobs this year.
Ericsson Chief Executive Kurt Hellstrom has now reportedly written to workers telling them that more job cutting was on the agenda at his company.
"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 wrote, according to the FT.
Ericsson warned last month it would post a loss of up to 5 billion crowns ($510 million) in the first quarter of 2001, excluding one-time gains, compared with an earlier forecast of roughly breakeven.
Ericsson said then that the economic slowdown in the U.S. was affecting "all operations," though its mobile-phone handset business was particularly hard hit.
The company went on to announce 3,300 more jobs cuts on March 27, adding to previous staff reductions.
The slashing of an additional 6,000 jobs, expected this week, will hit the company's operations inside and outside Sweden, and centre on marketing, administration, research and development and IT, the report said.
The company is making big losses on its handset sales, while its successful systems business has also been hit by the economic slowdown, particularly in the US.
Ericsson (ERICY: Research, Estimates) shares fell 6.6 percent to 56.50 crowns ($5.5) in Stockholm trading on Tuesday. 
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