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Ericsson: Market is bleak
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August 30, 2001: 5:22 a.m. ET
Ericsson sees no improvement in telecom markets, cost no longer rising
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LONDON (CNN) - Ericsson, the world's biggest supplier of wireless networks, said it does not yet see any signs of an improvement in the telecoms market.
"We are at the beginning of the efficiency programme, and have yet to see an improvement in the market," Ingemar Blomqvist, who is overseeing the Swedish company's restructuring progamme, said in Ericsson's weekly gazette.
The comments came as the UK's Spirent (SPT), a maker of telecom test equipment, warned its second-half performance would be depressed by difficult conditions in the U.S. market and announced plans to axe 500 jobs.
Ericsson last month posted a second-quarter net loss of 14.2 billion Swedish crowns ($1.4 billion) and took a big restructuring charge.
It is in the middle of a programme to cut more than 22,000 jobs, is farming out production of its mobile phones and has formed a joint venture with Japan's Sony to develop and market mobile-phone handsets.
Ericsson, like leading rivals Nokia and Motorola (MOT: Research, Estimates), is suffering the effects of the economic slowdown in the U.S. and a reduction in orders from debt-laden phone companies.
In its efforts to return to profitability the company plans to save 38 billion crowns a year from 2002.
"With the measures we have decided on, we can reach this goal," Blomqvist said. "Costs for research and development are no longer rising. Earlier they had been increasing every month.
Blomqvist's comments were made in Ericsson's Contact weekly magazine and translated from Swedish for CNN by Mads Madsen, director of media relations at Ericsson. The comments were earlier reported by Reuters. 
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