After reporting a 92 percent drop in fourth-quarter profits and falling short of analysts’ expectations, Ericsson (NSDQ: ERIC) said today that its restructuring efforts will include cutting 1,500 more jobs for a total of 6,500.
What’s more the company, which is the largest wireless equipment manufacturer, could not predict how 2010 will shake-out. Chief Executive Officer Hans Vestberg told Bloomberg in an interview: “It’s too early to say something about 2010.” The market “hasn’t been getting worse in the fourth quarter, it’s staying the same.”
The challenge is for Ericsson to maintain both marketshare and prices while facing aggressive competition from low-cost Chinese equipment manufacturers, like Huawei Technologies. Net income decreased to 314 million kronor ($43.4 million) in the fourth quarter from 3.89 billion kronor a year earlier. Analysts had anticipated profit of 2.5 billion kronor, according to Bloomberg. Revenue slipped 13 percent to 58.3 billion kronor.
Whether Ericsson grows is independent of the overall market growing. Most operators are making big infrastructure investments right now as they move from 3G to 4G. Ericsson also forecasts almost 3 billion new mobile subscriptions worldwide through 2014, adding to 4.6 billion existing ones.