Ericsson increases redundancy tally

The gloom which has enveloped the world's telecommunications industry deepened yesterday when Swedish equipment maker Ericsson said it was cutting thousands more jobs.

The company, which employs 61,000 people said it intended to cut the total to 47,000 instead of the 54,000 originally planned. A year ago Ericsson's payroll topped 80,000 people.

Last year French telecoms equipment maker Alcatel said it was cutting 20,000 jobs and earlier this month Nokia, of Finland, said its infrastructure operations would shed 1,800 posts.

News of the additional job cuts at Ericsson came as the company announced that first-quarter sales had fallen by 30% and it had lost a net SKr3.5bn (£265m).

New president and chief executive Carl-Henric Svanberg said the company still fell short of "operational excellence" and was looking for the additional cost cutting to bring the it back into the black after more than two years of losses.

"Although first quarter sales are likely to be the low point this year, I want us to be able to generate profit even if sales remain at current levels."

However the additional restructuring costs mean Ericsson may miss its original forecast that it would get back into the black this year. Yesterday Mr Svanberg said that it would make a profit "excluding additional charges for further restructuring".

Alcatel did little to lighten the gloom. The French equipment maker said its first quarter sales had fallen by 31% and it had made a loss of €461m (£319m). It cautioned that the market this year was likely to be slightly lower than anticipated as a result of economic uncertainty.