Dramatic end to bourse week

The Stockholm bourse ended the week in dramatic fashion following bad news from New York. Stockholm's OMXS index closed 1.2 percent down on Friday.

Friday had begun slowly with slightly falling prices which recovered by lunchtime. New US inflation statistics gave stock markets a boost across the world with energy and consumables prices showing no change in February.

Confirmation an hour later that US investment bank Bear Stearns was experiencing liquidity problems darkened the mood however. The bank has been obliged to secure financing from JP Morgan Chase & Co and the Federal Reserve department in New York.

The OMXS index started to fall and closed down 1.2 percent to 305.1 points. Shares worth 20.6 billion kronor ($3.4 billion) changed hands during the day.

Swedish steel firm SSAB bucked the negative trend after news that it had sold its north American pipe operation Ipsco Tubulars to Evraz for 24 billion kronor. The money will be used to reduce SSAB’s debt burden. SSAB A share closed up 4.8 percent.

Telecom firm Telia Sonera fell 1.3 percent to 46.50 kronor and pharmaceuticals giant Astra Zeneca fell 3.1 percent to 221 kronor.

Other European stock markets succumbed to the dark mood with London’s FTSE 100 down 1.07 percent to 5,631.70, Frankfurt’s DAX 30 down 0.75 percent to 6,451.90, and the Paris CAC 40 down 0.82 percent to 4,592.15.

New York’s Dow Jones Industrial closed down 1.6 percent to 11,951.09 while the Nasdaq Composite completed the rout, down 2.26 percent to 2,212.49.


Ericsson to slash 2,200 jobs across Sweden

UPDATED: Swedish telecom giant Ericsson is set to cut 2,200 jobs in Sweden, the company has announced in a press release.

Ericsson to slash 2,200 jobs across Sweden
Ericsson CEO Hans Vestberg. Photo: Jonas Ekströmer/TT

Workers will be laid off at the company's offices in Stockholm, Katrineholm, Borås, Kumla, Göteborg, Linköping and Karlskrona.

Sweden's capital Stockholm will be hit the worst, with 1,125 staff being let go. 200 jobs will go in Borås, 140 in Gothenburg, 130 in Kumla, 120 in Linköping and 85 in Karlskrona. The facility in Katrineholm will shut down completely.

According to the company, negotiations with unions are underway and workers affected by the layoffs will receive notice in June.

"This hits incredibly hard at all those who work at Ericsson and have loyally worked for the company's development. It also hits all the towns affected and especially Katrineholm," the chairman of Swedish union IF Metall, Anders Ferbe, said in a statement.

"We have seen factory upon factory being dismantled in the telecom and pharmaceutical industries – which used to be the pride of Sweden. There is a risk that research and development will go down the same path if we don't act," he added.

The layoffs are part of a money saving bid to save almost 9 billion kronor ($1bn) worldwide by 2017, said the Ericsson press release.

And telecom analyst Daniel Djurberg at Swedish bank Handelsbanken told news wire TT that the decision did not come as a surprise.

"If a company has to save nine billion, you can predict that employees and consultants will have to go," he said.

The move comes amid a week of turmoil for the Swedish telecom industry, after an announcement by Sony Mobile on Monday to cut 1,000 jobs at its facility in Lund.

Chief economist Jesper Ahlgren at liberal thinktank Timbro was among those warning that the wave of layoffs may pose challenges for Sweden to compete on the world market.

"It is a concern, particularly when it involves the research intensive companies. In Sweden it's mainly a few large private companies, like Ericsson and Astra Zeneca, who put a lot of effort into research. It is difficult to see how we would be able to maintain our competitive power if they downsize," he told The Local on Wednesday morning.

"This puts a lot of pressure on the government to act. Sweden needs to get its act together. We are very dependent on big companies for research and we need to look not only at how we support them, but also at how we encourage new companies to also take up the mantle," he added.

Ericsson CEO Hans Vestberg said the decision was inevitable and added more cutbacks are to be expected around the world.

"The view people ought to take of Ericsson is that we consolidate our position as world leaders in all the areas we work in. Unfortunately that also means a constant streamlining process," he told news wire TT.

Sweden's Enterprise Minister Mikael Damberg was told of the layoffs on Tuesday evening.

"I have appointed a group of secretaries of state from five ministries to co-ordinate the government offices' work on this issue, to stay in touch with local and regional actors and to ensure that the government offices are ready to act," he told TT.