Ericsson mulls 10,000 more job cuts

Another 10,000 jobs may go at Ericsson after the phone equipment maker warned it could not predict when falling demand for its handsets and network infrastructure would pick up.

The Swedish firm, which employs about 100,000 staff worldwide, has already axed 5800 contract workers and given notice to 3300 permanent staff since the beginning of April.

It has now increased the number of other jobs to be affected by the cuts during the rest of the year to almost 17,000.

Previously, the firm said around 7000 additional jobs would be affected, including 1200 in the UK. This will either result in redundancies, transfers within Ericsson, or people leaving to join firms to which Ericsson has outsourced work.

Kurt Hellestrom, chief executive at Ericsson, said: "While we cannot control the market, we can control our costs... these are tough but necessary actions to restore profitability."

Ericsson reported a loss of £933m (14.2bn Swedish kronor) for the three months to the end of June, and said the market would continue to be difficult for the rest of the year at least.

Last year, the firm reported profits of £670.4m (10.2bn kronor) for the same period.

Although handset sales continued to fall sharply, analysts were particularly concerned about the performance of the firm's network equipment division, where profits fell from £630m (9.2bn kronor) to £39m (600m kronor).

Hellestrom said: "Weak market conditions for our industry persisted... many of our customers have delayed spending on network expansion and in some cases postponed contracted deliveries.

"We cannot predict how long this situation will prevail as we have yet to see signs of improvement."

Ericsson this year has outsourced almost all its handset production to Flextronics, and is merging its design department with Sony.